Subject. The article discusses risks of a debt trap in the Russian economy. Objectives. The purpose is to identify risks of a debt trap in the Russian economy. Methods. The research is based on general scientific and special economic and mathematical methods. Results. The study highlighted a significant increase in the money supply relative to debt on loans and acquired claims on loans to resident legal entities and individual entrepreneurs, indicating the accumulation of excess liquidity in the financial system that threatens to increase inflationary pressure, reduce ruble’s purchasing power, and make debt servicing more difficult for businesses and the public. High volatility of the money supply to debt on loans ratio makes it difficult for banks to assess credit risks. Banks prefer to invest in low-risk financial instruments thus limiting the lending to small and medium-sized businesses, which slows down the development of entrepreneurship and increases imbalances in the economy. High cost of borrowings inhibits investment activity, increases the debt burden on businesses, and contributes to the formation of a "debt bubble", especially against the background of increasing dependence on government subsidies and concessional financing. Dominating corporate debt over household debt indicates an uneven distribution of financial resources thus limiting the opportunities for SMEs and increasing socio-economic stratification. Conclusions. The identified risks of a debt trap in the Russian economy are of particular value to government authorities, experts and researchers involved in the mechanism of monetary and macroeconomic regulation, and the adaptation of Russian institutions to external shocks and internal challenges.
Keywords: debt, credit, liquidity, risk
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