World Economy

Russia Budget Deficit 2.6% of GDP

Russia Budget Deficit 2.6% of GDPRussia Budget Deficit 2.6% of GDP

Russia’s budget deficit in 2015 amounted to 2.6% of GDP, Finance Minister Anton Siluanov said Wednesday.

“The budget deficit last year amounted to 2.6% of GDP. The number is lower than we had originally planned, I recall it was 3%,” he said. Earlier, the finance ministry forecast a deficit of 2.8-2.9%, Tass reported.

Low oil prices jeopardize balance of the Russian budget, the Bank of Russia said on Wednesday. “Low oil prices pose a risk to Russia and other exporter nations from the standpoint of the budget balance,” the regulator said.

According to OPEC experts, declining oil prices and sanctions against the Russian Federation by the European Union and the United States have little effect on the dynamics of oil production in the country and will remain stable with a slight increase to 10.8 million barrels per day by 2040.

The period of low oil prices may last for decades, Russia’s Economic Development Minister Aleksey Ulyukayev said. “For commodity-based economies such as Russia … the period of low commodity prices will be very long. I find it difficult to judge whether it’s the era of global commodity cycle or simply a new pattern. But I’m convinced that this is [going to be] a very long period of time,” he said.

Meanwhile, Igor Dmitriev, head of the Russian central bank’s monetary policy department, told reporters on Wednesday, that the bank may toughen monetary policy if its risk scenario materializes.

He said that there was no need so far to revise its risk scenario which assumes an oil price of $35 per barrel, while toughening of monetary policy doesn’t necessary mean a key rate hike.

Dmitriev also said that likelihood of risk scenario has increased comparing to December.