MOSCOW, November 24. The new fiscal rule has to come from oil prices in the medium term to $50 per barrel, said the Minister of Finance of the Russian Federation Anton Siluanov within the framework of the International forum of Financial University.
“We believe that we need a new fiscal rule based on oil prices as a maximum of $50 per barrel. As we can see that this price is likely to be in the medium term”, – said Siluanov.
Siluanov also said that this year the global economic growth to be around 2.9%, but forecasts are constantly adjusted for the worse.
“Therefore to say that the demand for oil and, consequently, price dynamics will improve, now we just do not have”, – he stressed.
Fiscal rule – the rule of formation of the Russian budget, which determines the maximum level of spending, based on oil prices. The purpose of the rules is to reduce the budget’s dependence on the volatile revenues. The essence of the rule is to transfer to the Reserve Fund additional oil and gas revenues, which are formed in case of excess of actual oil prices over the forecast. After the Reserve Fund exceeds 7% of GDP, additional oil and gas revenues should be directed to national welfare Fund. In addition, the fiscal rule sets a limit on the budget deficit in the amount of 1% of GDP. If the oil price decreases, then the calculated price defined as the average over the past three years.
The budget for 2016 is fundamentally different from a similar document, which was prepared in 2014 For the next year, the government draws up the annual budget, not reviewing the forecast 2017-2018. Also for next year cancelled the effect of budget rules, according to which the maximum level of expenditure shall be determined based on the average over the previous three years the price of oil.
As previously reported, the Finance Ministry expects the three-year budget with the budget rule next year.
“Budget for one year is an extraordinary measure. So next year we will do whatever is necessary to keep the budget had a three-year format, so that we had the opportunity to predict the longer – term,” Siluanov said, noting that such a budget will be provided and a fiscal rule.
© Nikolay Galkin/TASS
Budget 2016: tight but adequate