UPDATE2: PM: Russia budget income can exceed forecast by 1 tln rubles

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MOSCOW, May 18 (PRIME) – The Russian federal budget revenue can exceed an official forecast by 1 trillion rubles in 2017, Prime Minister Dmitry Medvedev said at a government meeting on Thursday.

“As for the federal budget income. It grew by almost 22% on the year in the first four months. This is at face value,” Medvedev said.

“We expect that this trend will remain, the total amount of income will be higher than we’ve planned while approving the budget. The estimates vary but it can be over a trillion rubles. This means that we can settle the budget with a lesser deficit than planned.”

The positive trends in the Russian economy persist and will hopefully become more noticeable in 2017, he said.

Additional subsidies are planned in a wide range of areas, Medvedev said. For instance, additional 24 billion rubles will be allocated for industry stimulation, including transport and special machinery manufacturing. Subsidies to high-tech goods producers, companies setting foot on foreign markets and participating in the program of foreign goods replacement will be extended.

Transport infrastructure will receive additional 15 billion rubles of subsidies; the Russian Agricultural bank 25 billion rubles, the pension system 11.5 billion rubles, the program of disabled people recovery 1.5 billion rubles. Regions which will show outstanding fiscal results will receive 10 billion rubles in subsidies and more than 3 billion rubles is to be spent on regional support.

Finance Minister Anton Siluanov said that Russia’s budget deficit may amount to 2.1% of the gross domestic product (GDP) in 2017.

“We expect budget revenue to rise by 1.144 trillion rubles this year. We suggest that budget spending should be raised by 315 billion rubles to reduce deficit by 829 billion rubles… to 2.1% of the gross domestic product,” he said.

The minister said that the government intends to send amendments to the 2017 budget to the State Duma, Russia’s parliament’s lower house, on May 26 so that it could adopt them during the spring session. He added that the amendments envisage no changes in expected income from dividend payments of state-owned companies and that the government will hold a meeting to set the dividends on Thursday.

Siluanov also said his ministry has lowered its 2017 budget income forecast from privatization by 96 billion rubles, after privatization of VTB Bank, now under the U.S. and the E.U. sanctions, had been put off, for fears of its lower market value.

“The overall so called missing sources of financing will amount to 117 billion rubles, first, due to a lower projected income from privatization by 96 billion rubles,” he said.

The official said that Russia’s Reserve Fund will be fully spent in 2017 and the Finance Ministry will begin to use money from the National Wealth Fund. He added that the Reserve Fund may be replenished in 2018.

(56.7383 rubles – U.S. $1)

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