Russia may balance budget this year with high oil prices - Ulyukayev
MOSCOW. March 16 (Interfax) - Russia might not end this year with a federal budget deficit thanks to expensive oil, First Deputy Chairman of the Central Bank of Russia Alexei Ulyukayev said.
"I am deeply convinced that we might balance the budget as early as this year," he said at a Wednesday conference in Moscow.
"You cannot have a budget deficit with revenue levels especially revenues associated with the price state of affairs. "We now have an annual average price of $101 per barrel for two and a half months. There are no indications that the level will fall strongly," he said.
Investors, he said, might not understand the logic of Russian budget policy.
"We had a road show when we were getting ready to place Russian sovereign debt denominated in rubles. We placed. But to explain to investors why we accumulated the Reserve Fund when oil cost $40 and now that it is $90 we are spending it is very difficult. The investor does not understand this, he cannot understand it, this logic, it doesn't happen," Ulyukayev said.
Ulyukayev's evaluation comes from a tougher approach to budget spending than that announced on Tuesday by Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister. His view is that the federal budget could be balanced in 2011 only if annual average oil prices of $115, which would be a significant rise in price from the current one.
Deputy Economic Development Minister Andrei Klepach, speaking after Ulyukayev, gave another estimate of a budget deficit that would result from oil prices persisting at the current level - 1% of GDP.
At this moment, this year's budget deficit is planned at 3.6% of GDP, at 3.1% for next year, and 2.9% for 2013. A balanced budget is planned for 2015. The deficit was 4.1% of GDP in 2010.
Before the global financial crisis, which forced the government into huge spending to prop up the economy at the same times as export-goods prices were plunging, Russia had been running budget surpluses for many years in a row.