Loss budget of Russia in 2016 at current oil prices will be 2% of GDP

Moscow. December 8. The budget of Russia in 2016 could be short about 2% of GDP in revenue if the current oil price and the ruble, says Finance Minister Anton Siluanov.

“The loss of budget revenues next year at today’s oil prices and the exchange rate, according to the Finance Ministry, can be of the order of 2% of GDP. This means that to complete the task the message of the President – to keep the deficit within 3% of GDP – will require measures to raise revenues, a more conservative approach to spending and measures to stimulate economic growth,” he told reporters.

The draft law on the budget for next year envisages GDP is 78 trillion 673 billion. Thus, the revenue shortfall is estimated at about 1.6 trillion rubles.

Earlier, the Finance Ministry announced an assessment of the risks of revenue leakage in connection with current oil prices and the ruble exchange rate to 1 trillion rubles.

The cost of the January futures for Brent crude on London’s ICE Futures exchange fell by 16:30 GMT to $40.1 per barrel, this is a new low since early 2009.

Last Friday the Organization of countries-exporters of oil decided to keep the actual oil production of about 31.5 million barrels a day. The members of the cartel agreed not to set quotas before its next meeting in June 2016.

The oil Minister of Iran Bijan Zanganeh said that OPEC’s decision means that “everyone can do what I want”. He estimates the excess supply in the market at $2 million. Iran is prepared to boost production immediately after the lifting of international sanctions against the country.

“It’s hard to find any bullish factors that could push oil prices up, says commodity analyst at Hyundai Futures Corp. Villas Yun. – The period of oversupply of oil in the world will be long lasting, because Saudi Arabia wants to cut production adjustments in connection with the return of Iran”.