"The global economy will face a debt crisis at the junction of 2026-2027"

The world is facing a serious debt crisis in 2026-2027, a senior VEB banker said in an interview with Izvestia at the Eastern Economic Forum.Russian Federation Sergey Storchak. According to him, today about 60 countries are already in the zone of excessive debt burden, and the covid spike in borrowing has only accelerated the growth of risks. He also noted that the dollar continues to be the dominant reserve currency, despite talk of its crisis, with countries increasingly switching to settlements in national currencies. For example, Russia's trade with China is already 85% conducted in yuan and rubles. Why the role of stablecoins in the global financial system is growing, under what conditions foreign investors will return to Russia and whether there is a risk of default in our country — in an exclusive interview with Sergey Storchak.

"Russia is in a state of confident debt sustainability"

— You said that the fourth wave of debt crises is coming. When can it start and which countries will be at the epicenter?

— I've been working on this topic for several decades. But the theory of debt waves itself was developed by experts from the World Bank. They identified three upswings, each culminating in a major financial crisis: first in Latin America, then in Asia, then in Europe. To answer your question more precisely, it is important to determine when the last European crisis ended and when a new wave of borrowing began.

A couple of years ago, I believed that the European crisis had ended in 2012. The cycle usually takes 10-12 years, and it turned out that a new global debt crisis was supposed to break out in 2024-2025. But that didn't happen. Therefore, it was necessary to adjust the assessment and recognize the finale of the last wave in 2015 - at the same time, the cycle of mass borrowing began. Let me remind you that Russia experienced a recession in 2015, from which it began to emerge only in 2016. If we count 12 years from 2015, then the global economy will face a serious debt crisis at the junction of 2026-2027.

At the same time, the covid shock became a catalyst for a sharp increase in debt: at that time, governments were borrowing on an unprecedented scale. Today, about 60 countries have excessive debt burdens, and the markets are feeling it. For example, the difference in the cost of borrowing between American treasuries (government debt securities) and bonds of other countries has increased — this is a signal of the approach of a serious correction. But it is difficult to predict who exactly will be at the epicenter: such crises usually begin unexpectedly.

Let's recall the American crisis: it began with the fact that Mexico refused to service its debt. I remember well the cartoon in the magazine Institutional Investor in 1981. It depicts a Mexican man in a huge sombrero — then the country was just preparing for the World Cup. So instead of a soccer ball, he kicks the globe into a debt hole. It's a great cartoon, too bad I didn't save it. She reflected the situation very accurately.

— How much is Russia at risk?

— Russia is not included in the risk zone. As Vladimir Vladimirovich recently noted, we have a very low public debt, both external and internal. Russia is in a state of strong debt sustainability.

Therefore, the Ministry of Finance has the opportunity to borrow funds to finance the budget deficit. Russia's debt burden remains within 20% of GDP. For comparison, in many developing countries, this figure has approached or exceeded 60%, while in developed countries it has exceeded 200% after the pandemic. In the United States, the national debt for the first time exceeded 100% of GDP and, according to the latest data, is approaching 130%.

But Americans have very deep financial markets, so serious refinancing problems are not expected. In addition, the current administration easily agreed to raise the debt ceiling by another $5 trillion, which also shows their confidence.

In general, debt ratios are a peculiar thing. Japan has been living with a debt-to-GDP ratio above 240% for decades.

"It is impossible to talk about the crisis of the dollar today"

— As for the dollar, it is still the main reserve currency, despite the talk of de—dollarization. Can we expect his role to decrease and what can replace him?

— First of all, it's about dominance. It is expressed in numbers. The dollar's share in international trade and settlement documents is about 60%. About the same part is in the reserves of central banks. International claims and debts to commercial banks are also about 60%. In the issue of debt bonds — the same value. Even on currency exchanges, where the competition is higher, the dollar occupies about 45%. Therefore, it is impossible to talk about the crisis of the dollar today.

Moreover, three laws are being passed in the United States this year on the transition to the mass use of payment stablecoins. One has already been signed. It provides that a wide range of companies will be able to issue such tokens if they have a license. But on the condition that each issue is backed by a dollar — either with live money in the account, or with treasury securities of the US Treasury. This means an increase in demand for US bonds and support for the dollar.

The United States has taken the path of private issuance of stablecoins. Most countries — there are about 80 of them — are developing digital currencies of central banks. Russia has also announced a digital ruble. But different approaches will make it difficult to coordinate regulation in the field of digital financial assets.

In America, they decided that stablecoins are already money issued by the private sector along with the dollar. The situation is unusual. According to the law, the entry into force of the new rules will take 120-180 days. Four regulators will then be appointed to monitor the process and issue licenses. Only authorized issuers will be able to issue stablecoins.

This did not come as a surprise to participants in the American market, but it caused surprise outside the United States. We are currently analyzing what this could mean for the international financial system. It is impossible to predict yet: the volumes are negligible compared to the dollar's turnover — only about 5%.

There is also a methodological problem here. The stablecoin is backed by a one-to-one dollar. But it is unclear whether to consider it as a separate currency or as a derivative of the dollar. We're not saying "dollar euros" or "dollar yen." We say: euro, yen, dollar. Here, one tool is provided, the other is not.

As a result, the dollar is based solely on trust. The situation is interesting and requires constant monitoring: we need to see how many companies and banks will actually enter this market. In addition, one of the laws explicitly prohibits Fed member banks from issuing stablecoins.

"Foreign brands continue to work with us, they just don't advertise it"

— What does Russia's place in international investment projects look like today? Who is the most actively cooperating with?

— We still consider ourselves to be an emerging market country. According to the latest data from the Bank for International Settlements and the IMF, over the past decade, financial flows, in particular foreign direct investment, have gone mainly to developed countries.

Previously, the reverse trend was observed: capital from developed countries was directed to emerging markets. Now the situation has changed, and this also applies to us. It's not just about political constraints, but also about global restructuring. It is difficult to predict when it will unfold.

The Fed has been keeping interest rates high for a long time. And this is the country that issues the reserve currency. Therefore, owners of temporarily available funds prefer to invest them there, both reliably and profitably.

In our situation, the key issue is the investment climate. This was the topic that was discussed at the sessions organized by VEB. We need to clearly understand what it should be like in order to really attract foreign partners and investors, and gradually improve it. One of the most important factors is the stability of the regulatory regime. As far as I can see, the Ministry of Finance and the Central Bank are solving these issues quite confidently.

The tax regime is generally stable. Recently, the changes mainly concerned individuals and personal income tax. For companies, it remained relatively predictable, although, of course, there were some fluctuations.

— But in general, what is our investment climate like now?

— Due to political factors, it is naive to expect that large investors with resources and new technologies will openly enter our economy. But many companies have a desire to stay in Russia. Foreign brands continue to work with us, they just don't advertise it. The president also spoke about this, emphasizing the need to act as carefully as possible so as not to be exposed to external pressure. This is the right position.

— What needs to happen for our investment climate to become really attractive for open entry of investors?

"This will be possible when we reach a long—term, sustainable and just peace, and national security issues are resolved for both sides — for us and for our neighbors.

The formula that the President and the Minister of Foreign Affairs constantly talk about is that the security of one country should not be achieved at the expense of the security of another. When it works in practice, then the conditions for open investments will appear. We hope that the Russian and Ukrainian negotiators will be able to move closer to these positions in the coming months.

"The main trend is the expansion of settlements in national currencies"

— What do you see as the most realistic scenarios for cross-border settlements: digital ruble, CFA, cryptocurrencies? Or will we still have to wait for sanctions relief and a warming of relations with the United States?

— The main trend formed before the current events was the transition to settlements in national currencies.

There is a lot of talk about digital money or cryptocurrencies now. To be honest, I don't really understand if there is a fundamental difference between them or if they are synonyms. But in any case, the transition to this field requires time, technological solutions, investments and preparation. And economic relations cannot wait.

Therefore, we have been working for a long time, both within the framework of BRICS and the SCO, to institutionalize payments in national currencies. Businesses are actively using this. About 85% of foreign trade settlements between Russia and China are already made in yuan and rubles. Settlements in national currencies have also been prevalent between Russia and Belarus for a long time.

I remember well when the Russian ruble became the reserve currency for Belarus for the first time. This is a fact: they accumulated reserves in order to maintain the exchange rate of their ruble against ours and service debt obligations incurred as a result of Russian investments.

So the main trend is the expansion of settlements in national currencies. Of course, as soon as it becomes possible to restore correspondent accounts in reserve currencies, companies will return to this, especially for shipments to foreign countries.

But the fact remains that multilateral development banks are already switching to settlements in national currencies. For example, the New Development Bank (BRICS) has set itself the goal of bringing the share of such operations to 40% of the balance by 2035. According to the president, he already conducts about 28% of transactions in national currencies.

Of course, this is not only about the ruble, but also about the currencies of all the founding countries of the BRICS five banks.

"The exchange rate factor and seasonality have worked in the drawdown of trade between Russia and China"

— In the first seven months of 2025, trade between Russia and China fell by 8%. Is this a temporary decline or the beginning of a long-term trend?

— I think this is a seasonal phenomenon. Let's look at the situation with oil prices: they have seriously declined, hence the decline in indicators. In physical volumes, trade most likely has not decreased so noticeably. The exchange rate factor and seasonality have been at work in the drawdown of trade between Russia and China.

Moreover, we see that Russia, China and Mongolia have agreed to build a new gas pipeline through the territory of the latter. The project has been named the largest energy project in the current century.

Only one figure was announced — the volume of supplies will be 50 billion cubic meters. m per year. For comparison, the Turkish Stream or the Nord Stream provide about 30 billion each. We haven't had such a big project yet.

Vladimir Vladimirovich brought this news from Beijing. Negotiations have been going on for several years, and it seems that a breakthrough has been found. Agreements have been reached to prepare intergovernmental agreements and a classic trade contract.

I was surprised by the statement of the Prime Minister of Mongolia that the country will also purchase gas from this pipeline in order to improve the environmental situation, primarily in Ulaanbaatar. I've been there, and I know that the smog from coal-fired heating is heavy in winter.

It's hard to say how many years it will take to build, but the fact itself is positive news.