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UPDATE 1-Russian budget deficit may hit 3.5-3.7 pct of GDP this year - FinMin
September 30, 2016 / 10:21 AM / a year ago

UPDATE 1-Russian budget deficit may hit 3.5-3.7 pct of GDP this year - FinMin

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By Darya Korsunskaya

SOCHI, Russia, Sept 30 (Reuters) - Russia’s federal budget deficit could hit 3.5-3.7 percent of gross domestic product this year, Finance Minister Anton Siluanov said on Friday, a sign that low oil prices are continuing to hurt the commodity-dependent economy.

Buffeted by Western sanctions and lower oil revenues, the Russian government is struggling to plug holes in the budget and revive an economy stuck in a deep slump.

Finance ministry officials had previously said they hoped to limit the deficit to 3.2 percent of GDP. President Vladimir Putin said this week that the size of the budget deficit was acceptable for now.

Siluanov said Russia would increase domestic borrowing by 200 billion roubles ($3.2 billion) in 2016.

“By the end of the year we will reach the borrowing level that we must stick to next year, we will borrow around 30-40 billion roubles a week,” the minister told reporters at an investment forum in Sochi, southern Russia.

He said his ministry would include the privatisation of state stakes in oil firms Rosneft and Bashneft in amended budget plans for this year that are set to be submitted for government discussion next month.

If stakes in those firms were not sold to investors this year, Russia would spend more of its reserves, he said.

Under amended budget proposals, the finance ministry was so far sticking to spending 2.1 trillion roubles from the Reserve Fund this year, he said.

$1 = 63.2929 roubles Writing by Alexander Winning and Maria Kiselyova; Editing by Andrew Osborn

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