Budget will be short 3 trln rubles in oil and gas revenue with $35/barrel oil, $40/barrel more likely - Kudrin
MOSCOW. March 12 (Interfax) - The Russian budget will lose out on several trillion rubles in oil and gas revenues in the event that oil prices remain at a level of roughly $35/barrel and will see its first deficit in several years, Accounts Chamber head Alexei Kudrin said during discussions on amendments to the federal budget in the Federation Council. However, the base scenario for the oil market is actually a little more optimistic, Kudrin said.
"If we proceeded from today's figures, a price of roughly $35/barrel, an exchange rate of around 72 rubles per dollar, then we will lose out on around 3 trillion rubles in oil and gas revenues. As such, the budget deficit this year could be less than 2% of GDP," Kudrin said."
At the same time, in this scenario, economic growth in 2020 will be close to zero, the head of the Accounts Chamber said.
"The coming two months will show us the scenario the whole global economy will follow, whether we will be able to neutralize the risks associated with coronavirus, which is affecting the oil market as well," Kudrin said. In his estimates, the base scenario will be slightly better - an oil price of $40/barrel or slightly higher. "That is it will be slightly better than the scenario which I just described. But nevertheless, I suspect that we will still be closer to zero values of economic growth, in positive territory but closer to zero, and will still see a budget deficit. Investments are likely to decline compared with the previous year. These are the new realities," Kudrin said.