UPDATE: Auditors see Russian budget deficit at 2.6% of GDP in 2015

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MOSCOW, Jan 14 (PRIME) -- Deficit of Russia’s 2015 federal budget stood at 2 trillion rubles, or 2.6% of the Gross Domestic Product (GDP), Audit Chamber’s Director Tatyana Golikova said at the Gaidar Forum citing preliminary data on Thursday.

“According to recent data, federal budget deficit stood at 2 trillion rubles in 2015, expenses amounted to 15.6 trillion rubles and revenues stood at 13.6 trillion rubles,” she said.

The Audit Chamber has uncovered 440 billion rubles worth of violations in execution of the federal budget, she said. The bulk of violations were connected with investment programs, management of state property and state procurement.

Deficit of Russian regions’ consolidated budget amounted to 191 billion rubles in 2015, Golikova said.

“Regions had posted quite a big consolidated budget surplus during 2015 until December 1. But there was a deficit of almost 191 billion rubles for the 12 months,” Golikova said. “That means that regions had quite big budget expenses in late 2015.”

Among 85 Russian regions, 76 posted budget deficits and only 9 regions had budget surplus in 2015, she said.

The chamber has no precise data on regional debts yet, but the situation raises no concern. The Finance Ministry is seeking to replace regional commercial debt with budget lending at beneficial interest rates, and the 2016 federal budget envisages a 310 billion ruble financing for the purpose.

EMERGENCY ADJUSTMENT OF 2016 BUDGET NOT NEEDED

There is no sense to adjust the 2016 budget, which was adopted in December 2015, in January despite extremely low oil prices, the official also said.

“There is no need to make decisions on necessary emergency adjustments of the budget in January, although the oil price fall against the price envisaged in the budget is quite dramatic for us,” she said.

The 2016 budget is based on an average oil price of U.S. $50 per barrel, but at present quotations stand at about $30 per barrel. The 2016 budget deficit is estimated at 2.36 trillion rubles, or 3% of the 2016 GDP. The revenues are expected at 13.738 trillion rubles and the expenses – at 16.099 trillion rubles.

The current economic situation is not the same as during the crisis of 1998, when Russia also faced difficulties on the back of low oil prices, but risks for execution of the budget in 2016 exist, according to Golikova.

On Wednesday, Finance Minister Anton Siluanov said that the government will have to reduce budget spending by 10% this year.

On Tuesday, Sergei Ryabukhin, head of the budget committee at the Federation Council, the parliament’s upper house, said that the government may soon submit draft adjustments to the 2016 budget to parliament seeking to reduce state spending and in such case parliament will consider them urgently.

Ministries must submit proposals on cutting budget expenses to the Finance Ministry by mid-January. The proposals on adjustment of the 2016 budget must be developed until the end of March.

Deputy Economic Development Minister Oleg Fomichyov said that budget financing of all state programs will be cut in 2016.

“Our state programs are implemented in very important public spheres, that is why their decrease is, of course, possible, but halting a whole state program is impossible,” he said.

“Most likely all state programs will be decreased. Maybe, financing of agriculture or Crimea will be kept, but it means that other state programs will be reduced more.”

(76.4275 rubles – U.S. $1)

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