Econ minister sees Russia’s 2015 budget deficit at 3.8% of GDP

Feb 11, 2015 12:00 AM

Russia’s budget deficit in 2015 may amount to 3.8% of gross domestic product (GDP) and budget income may fall 2.34 trillion rubles, Economic Development Minister Alexei Ulyukayev told quoting the ministry’s adjusted social and economic development forecast.

“We calculate deficit at 3.8% of GDP. From my point of view, it can be fully covered by the Reserve Fund,” Ulyukayev said, adding that budget income will fall 2.34 trillion rubles, including a 2.2 trillion ruble decline of oil and gas incomes.

The ministry expects the country to have a balanced budget by 2017 if oil prices are at U.S. $70 per barrel, under the current budget rule, he said.

The forecast also envisages investment activity in Russia falling by 13.7% on the year due to the ruble’s devaluation and high credit rates for end-use borrowers.

Ulyukayev also said that the government will discuss suspending indexation of wages to state workers and social payments in 2015, which was offered on Tuesday by Finance Minister Anton Siluanov in order to ease the budget.

“I am not ready to give you a final answer right now. It is discussable. We should discuss it by comparing alternatives, estimating what we will receive if we cut the indexation. It will give us about 30 billion rubles in 2015,” he said.

In its forecast, the ministry also sees the country’s economy declining 3% in 2015 and inflation rising 12% basing on an oil price of $50 per barrel. Earlier on Wednesday, Prime Minister Dmitry Medvedev said that the government should prepare an adjusted 2015 budget based on the forecast and bring it to the State Duma, the parliament’s lower house, in March.

(65.4469 rubles – U.S. $1)

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