UPDATE: Finance minister sees Russia’s 2016 budget deficit at 3.5–3.7%

(Adds comments in eighth paragraph)

SOCHI, Sep 30 (PRIME) -- Russian budget deficit will amount to 3.5–3.7% of the gross domestic product (GDP) in 2016, not 3% as earlier planned, Finance Minister Anton Siluanov told reporters on Friday citing amendments to the 2016 budget drafted by the Finance Ministry.

The Finance Ministry’s latest forecast implied a deficit of 3.3% of GDP, while the central bank projected it at 3.6% of GDP.

“The deficit will increase to 3.5–3.7% of GDP depending on how the deal with Bashneft is structured,” Siluanov said.

“If it is structured through Rosneft and Rosneftegas, it will reduce budget deficit. If this is structured as an ordinary not connected with Rosneft, it means that it will be just a source of financing budget deficit,” he said.

He said he expected that privatization of Rosneft and Bashneft will take place this year.

The ministry also expects a revenue of just 40–50 billion rubles from privatization of other assets in 2017, he said.

Spending of the Reserve Fund will remain at 2.1 trillion rubles as planned before, Siluanov said.

The Reserve Fund will be fully depleted by the end of 2019, while the volume of the National Wealth Fund will decrease to 500 billion rubles, he said. The wealth fund stood at 4.719 trillion rubles as of September 1.

The Finance Ministry will not revise the oil price of U.S. $40 per barrel set aside in the 2017–2019 budget and will decrease spending of reserves and loans if the price increases, Siluanov told Rossiya 24 television channel.

(63.1581 rubles – U.S. $1)

End