Russia to have budget deficit of 1.6% of GDP, non-oil deficit of 7.2% in 2018 - Siluanov
MOSCOW. June 29 (Interfax) - Russia will have a budget deficit of 1.6% of GDP in 2018, narrowing to 0.9% in 2019 and 0.8% in 2020, Finance Minister Anton Siluanov said at Thursday's Cabinet meeting.
"The budget deficit will be 1.6% in 2018 and the non-oil deficit will be 7.2% of GDP. This will be the lowest deficit in recent years. After that the budget deficit is expected to narrow gradually, to 0.9% in 2019 and 0.8% in 2020," he said.
"The basic characteristics of the budget were drawn up taking into account the existing 2017-2019 budget, including revisions to the revenue portion and revisions to separate spending items. For revenue, we increased, based on the forecast parameters, the revenue portion of the budget by 630 billion rubles. Here we see growth both for oil and gas revenue and for non-oil revenue. Importantly, the share of revenue not connected with oil and gas is increasing from year to year. This year we expect non-oil revenue to have a 60% share of all revenue, while next year we expect this indicator to be 63%," he said.
"For spending, we also took as the base those budget parameters that were included in the existing three-year budget. We propose increase the volume of spending based on the forecast growth in non-oil revenue. That is, the basic principle is being preserved: that we increase spending only by the amount of revenue not connected with oil and gas," Siluanov said.
The budget parameters were drawn up taking into account the budget rules approved by the government, under which the 2018 budget will have a small primary budget deficit. "That is, the calculation excludes spending to service state debt," he said. The budget rule will fully enter force in 2019.
Given a reduction in the budget deficit, the Finance Ministry proposes decreasing spending from the reserve funds. "Next year, it will be half the figure in the current year. Beginning in 2019, we will not spend any money from the reserve funds and finance the deficit exclusively using domestic sources of borrowing and a certain amount of external sources," Siluanov said.