Russia Unlikely to Narrow Budget Deficit in 2012

Russia is unlikely to narrow federal budget deficit this year because of low oil prices, Finance Minister Anton Siluanov said on Saturday.

Russian President Vladimir Putin signed amendments to the 2012 budget in early June considerably increasing the projected oil price for this year to narrow the budget deficit from 876.589 billion rubles ($27 billion) or 1.5 percent of GDP to just 68.144 billion rubles ($2 billion) or 0.1 percent of GDP.

“The deficit is likely to be higher than 0.1 percent of GDP. It is likely to be about 1.5 percent of GDP as it was at the initial terms of the budget,” Siluanov told reporters.

The amendments were initiated in the spring of 2012 when the price of Russia’s Urals export crude blend hovered at the level of $115-120 per barrel, prompting the government to increase the projected average oil price for the year from $100 to $115 per barrel.

Siluanov also said that the government was going to introduce new rules for budget to make it less dependent on oil and gas revenues from 2013.


Leave a comment