25 Nov 2009 14:03

Russia could have budget deficit of 9.6% GDP in 2009, balanced budget in 2012

MOSCOW. Nov 25 (Interfax) - Russia could have a federal budget deficit of 6.9% of GDP in 2009, and a balanced budget is "theoretically possible" in 2012 depending on oil prices, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, said at the Federation Council.

The planned deficit was originally 8.3% but, thanks to high oil prices and the exchange-rate policy, "we will have a deficit of 6.9% of GDP," Kudrin said.

Next year's forecast deficit is 6.8% of GDP, he said.

Kudrin said a "balanced budget is possible [in 2012] if oil trades significantly higher than $60 a barrel, for example approaching to $100."

But oil could not hold so high for long, he said.

The 2012 budget is so far being planned with a deficit of 3% of GDP "with public spending cuts," he said.

"I think if that sort of price [$100 a barrel] does emerge it will be very temporary, and I don't think it could hold firm at that level for a period of three years," Kudrin said.

But a balanced budget "is theoretically possible even in the next three years if oil trades as considerably higher than $60 a barrel and approaches $100," he said.

The Federation Council Wednesday approved the 2010 federal budget and the budget outline for the period 2011-2012.

The projected 2010 budget deficit is 2.9 trillion rubles or 6.8% of GDP, the 2011 deficit - 1.9 trillion rubles (4%) and the 2012 deficit - 1.6 trillion rubles (3%).