Fin minister sees Russia’s budget deficit at 2% of GDP in 2017

SOCHI, Feb 27 (PRIME) -- Russia’s budget deficit will amount to about 2% of gross domestic product (GDP) in 2017, less than the planned 3.2%, and the Finance Ministry will adjust budget parameters in March–May by increasing some spending, Minister Anton Siluanov said Monday on the sidelines of the Sochi Investment Forum.

“We will have an (additional) non-oil and gas income (this year), this is true. And we will decide on some items (of budget spending),” he said.

“We will not only have to increase spending, we will have to adjust parameters (of the budget) on revenues and deficit in the first place.”

He said that spending will be increased including on secret articles, while the expected deficit will be by about 1 percentage point lower than the current target of 3.2%.

The ministry will also submit a new budget rule for consideration of the parliament’s lower house State Duma this spring, he said. The rule will be based on an oil price of U.S. $40 per barrel in real terms, and all oil and gas revenue received above the price will be transferred to reserve funds.

“I mean that we will have to adjust the parameter on the basis of a forecast for inflation in the U.S. dollar terms,” he said, adding that he was speaking about inflation in the U.S.

The government will define dividend payments for state companies in a month. “We have agreed to look at financial results of companies, which will pay the bulk of dividends, again. We are in the process right now. I think we will meet in a month and make a decision,” Siluanov said.

He said that the ministry stands against individual tax preferences for oil fields as it is inefficient, and preferences for the Samotlor field – the major part of which is developed by Rosneft – will be provided within the framework of the added income tax.

“Proposals to implement an experiment of the added income tax with a further switch to a permanent use of the tax, which were developed by the Finance Ministry and coordinated with the Energy Ministry, are correct. It also allows us to take into account difficult and additional costs of development of 90% water-logged fields,” he said.

Siluanov also said that the Russian authorities do not discuss any plans to limit cash settlements in the country in the next two years.

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