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Business Europe

Russia to run budget deficit in 2009, first in a decade

Latest update : 2008-12-24

A Kremlin economic aide said Russia would run a budget deficit in 2009 for the first time in ten years. He also held out the possibility that Moscow could seek external loans, though ruling out an appeal to the IMF as in the 1990s.

AFP - Russia will run a budget deficit in 2009 for the first time for a decade, a Kremlin economic aide was quoted as saying by RIA Novosti news agency on Wednesday.
"Yes, there undoubtedly will be," Arkady Dvorkovich, an advisor to President Dmitry Medvedev, said in response to a question about whether Russia would have a deficit next year.
"The deficit is caused by the fall in oil prices, above all," he said, adding that the government would tap into its reserves accumulated from years of high oil prices in order to cover the gap.
He also held out the possibility that Russia could seek external loans to overcome the fallout from the global financial crisis.
"If necessary, we will do this," Dvorkovich was quoted as saying by RIA Novosti and ITAR-TASS, although he added that Russia would not turn to the International Monetary Fund (IMF) as it did in the 1990s.
"We are only talking about loans from the market.... The discussion is not about the IMF or other such organisations, we will definitely not ask for their services," he said, according to RIA Novosti.
Russia has had budget surpluses since 1999. Until recent months the government enjoyed strong revenues from the rising price of oil, Russia's main export, but oil prices have plummeted amid the global economic slowdown.

Date created : 2008-12-24