Russia could have 6%-6.8% budget deficit in 2010
MOSCOW. April 1 (Interfax) - The Russian Finance Ministry estimates this year's budget deficit will be 6%-6.8% of GDP, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, told reporters.
"We're not yet expecting a significant reduction in the deficit, which will be an estimated 6%-6.8%," Kudrin said.
The Finance Ministry is not looking to "reconsider the budget's revenue section," Kudrin said. "We have not yet received enough data that would say revenues will be greater."
Despite oil price growth, the ruble could strengthen against other currencies, "and instead of what we planned, 33.9 rubles to the dollar, we will have an exchange rate of around 28-29 rubles to the dollar," Kudrin said. That means, he said, that "for every dollar we earn we will be losing two or three rubles in conversion due to a firmer ruble exchange rate."
Income from export operations will also decrease, he said. Accordingly, "higher oil prices increase revenue, but a strengthening ruble decreases it, and we will receive roughly the same revenue," he said.
With pension system revenues being less now than planned, there could be increased federal budget spending to finance the Russian Pension fund budget shortfall.
In light of all these circumstances, the Finance Ministry is not now revisiting budget revenues for 2010, and also is not expecting a large deficit reduction.