Russia plans 3% budget deficit in 2016: minister

22nd October 2015, Comments 0 comments

Russia's budget deficit is set to reach around 3.0 percent of gross domestic product in 2016, with plans to spend $1 billion on a fund supporting key economy sectors, Finance Minister Anton Siluanov said Thursday.

"We have fulfilled the instructions of the government, by setting the budget deficit at 3 percent of the GDP," Siluanov said, quoted by Russian news agencies.

Earlier versions had set the deficit lower at around 2.8 percent, TASS state news agency reported.

Siluanov said spending was planned at 16.098 trillion rubles ($257 billion) while budget revenues were forecast at 13.378 trillion rubles ($220 billion).

Defence spending is set at 3.145 trillion rubles ($50.2 billion), RBK business daily reported Wednesday, citing leaked government documents, the second highest item after social spending.

Russia after being able to balance its finances for many years, has been hit by the plunge in prices for oil, which along with gas makes up half of revenues, as well as Western sanctions over the Ukraine conflict, triggering a severe recession.

The latest budget will cover only the next year, not three years as usual. It has been the subject of intensive discussions over the last few weeks.

A final draft version will be submitted to lawmakers by the end of the week, Prime Minister Dmitry Medvedev said Wednesday.

The government has opted to pour 65 billion rubles into a new fund to "support priority sectors of the economy," Siluanov said.

The government also plans to offer 30 billion rubles ($479 million) of government bonds to members of the public, echoing a Soviet practice, Siluanov said.

© 2015 AFP

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