Siluanov: Russia’s Budget Deficit Could Reach 0.9% of GDP Under Current Oil Prices

Russia’s Finance Minister Anton Siluanov told the upper house of parliament on Saturday that the country’s budget deficit could reach 0.9% of gross domestic product (GDP) in 2020 at current oil prices, Reuters reported.

The country’s economy has been hit by a slump in global oil prices and the spread of the coronavirus, with the minister saying the latter was having the bigger effect as it complicated transportation, tourism and trade.

Russia previously expected a 2020 budget surplus of 0.8% of GDP, but budget revenues from oil and gas at current prices are set to decline by about 2 trillion roubles ($27.7 billion) compared with previous estimates, Siluanov said.

“With the current prices for energy resources, we will have a deficit of up to 1% of GDP. We estimate that it will be at 0.9% of GDP,” the minister said, adding that all budget obligations would be met.

Russia has a rainy-day National Wealth Fund (NWF) made up of oil revenues accumulated in previous years. It is part of Russia’s sovereign reserves and held 8.2 trillion roubles ($113.5 billion), or 7.3% of the country’s GDP, as of March 1.

The country will spend 600 billion roubles from this fund in 2020, including on a previously disclosed state plan to purchase a 50% + 1 share in Sberbank, the country’s largest lender, from the central bank.

Siluanov added that the finance ministry expects oil companies to add 500 billion roubles to the fund this year.

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