Russia Girds For Deficit, High Inflation
2009年2月26日
Russia's first budget deficit in a decade will reach 8% of gross domestic product this year, Finance Minister Alexei Kudrin said Wednesday, adding that further budget concessions are needed to allow spending to contain the economic crisis.
Speaking at the annual State Treasury meeting, Mr. Kudrin said Russia faces a very painful year. 'A deficit of 8% is the maximum amount we can afford in the current situation,' he said.
A bigger shortfall would fuel inflation beyond the already high forecast of 13% to 14% for this year, he added.
Most money to cover the deficit would come from the Reserve Fund, one of two funds consisting of windfall oil revenue. That revenue comes from taxes paid by exporters when oil rises above $27 a barrel.
The Kremlin has been working on the budget since early January. It will be ready by March 8, Mr. Kudrin said, but is a work in progress, as about one trillion rubles ($27.89 billion) of planned spending must be reallocated to meet the deficit target and fund efforts to contain the financial crisis.
The task isn't easy, said Mr. Kudrin, a 12-year veteran of the Finance Ministry, because Russia will also see 2009 budget revenue drop 42% from estimates, amid plunging oil prices.
Prime Minister Vladimir Putin, whose popularity is starting to flag as Russians endure the worst crisis in a decade, ordered a new budget to be based on an oil price of $41 a barrel -- compared with the $95-a-barrel average price assumed earlier. 'Not many countries face such drastic budget revisions,' Mr. Kudrin said. Last week, President Dmitry Medvedev criticized the government for an 'unacceptably slow' response to the crisis.
Lidia Kelly
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