The Stable Outlook is supported by our expectation that

Weak fiscal performance has led to a consistently negative current balance that is insufficient for debt service and debt metrics that are no longer commensurate with a ‘BB ‘ rating. The Stable Outlook is supported by our expectation that Karelia’s market debt (bank loans and bonds) is unlikely to increase significantly in 2015 2016, remaining at about 45% 50% of current revenue (2014: 42%). In nominal terms, however, the republic’s direct debt may increase up to RUB14bn in 2016 from RUB10.5bn in 2014.

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