Finance ministry wants to inject 16 bln rbl into industry fund

MOSCOW, Oct 2 (PRIME) -- Russia’s Finance Ministry has suggested injecting 16 billion rubles into the industry development fund in 2017, Minister Anton Siluanov told the Federation Council, the parliament’s upper house, on Monday.

“We will continue to develop the industry development fund, as an instrument that has proven its worth. We will even suggest you, members of the parliament, discuss the issue of raising the fund by 16 billion rubles this year,” he said.

He added that the government plans to continue provision of loans at preferential rates to some industries from the fund.

He also said he hopes that the budget policy of the ministry will help the central bank to continue cutting its key rate from the 8.5% to which the rate was reduced on September 15.

“We will narrow budget deficit from 2.2% of GDP (gross domestic product) this year to 1.4% next year and to below 1% of GDP in the following two years. This allows the central bank to cut the key rate. We saw such dynamics this year, and we hope that the central bank will continue this policy taking into account implementation of the budget policy,” he said.

“Today the key rate is in fact significantly higher than the threshold inflationary figures that we forecasted.”

The ministry does not expect the oil price to fall below U.S. $40 per barrel in the next few years. “We think that the level of $40 per barrel is balanced and the figure takes into account supply and demand at the world oil market. Even if the price falls below the point, our estimates show that it will not remain there for long,” he said.

The new budget rule stipulates that Russia will allocate all additional oil and gas incomes of the budget at a price of above $40 to reserves starting from 2018. The Economic Development Ministry expects the average annual oil price at $49.9 per barrel in 2017, and a budget draft sees the price at $43.8 in 2018, at $41.6 in 2019, and at $42.4 in 2020.

(58.0169 rubles – U.S. $1)

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