Kudrin predicted the widening hole in the budget


Ex-Finance Minister Alexei Kudrin expects the budget deficit this year at the level of 5-5. 5% of GDP. “The budget deficit will be this year, 5% of the GDP to be at 5.5% without additional indexing,” he said speaking at the 7th Congress of the Pension.

Kudrin said the Federal budget deficit was planned at the level of 3% of GDP, but in reality the situation is much worse. “In these conditions it is difficult to talk about the indexation of pensions”-, Kudrin said, commenting on the statement by the representative of the Ministry of labor.

Earlier, speaking on Board the Congress, Deputy head of pension provision Department of the Ministry of labor Dmitry Belovolov reported that in the second half of the year may make an additional indexation of pensions. He said that indexation of pensions from 1 February, only 4% was carried out due to difficulties with balancing the budget. Belovolov said that indexation will be carried out to the level of inflation for 2015. This idea supports the social block of the government.

The budget deficit of the Russian Federation for January-February amounted to 112,7 billion rubles, or 0.9% of GDP, reported earlier by the Finance Ministry. The President of the Russian Federation Vladimir Putin instructed to ensure that the budget deficit has not exceeded 3% of GDP.

In late February, Finance Minister Anton Siluanov warned that the budget deficit in 2016 could grow to 4% of GDP when the price of oil at $30 per barrel. Then he clarified that, according to the instructions of the President, 3% budget deficit – excluding support costs on the web.

In February the Minister of economic development Alexei Ulyukayev said that annual average price per barrel at $40, the budget may be in deficit of 4.6-4.7% of GDP. The deficit will be covered from the funds from privatization, as well as through loans.

From privatization, the government expects to raise 800 billion roubles, it was said to the speaker, will cover about 1% of GDP overall budget deficit. To Finance the deficit the government is also trying to attract foreign loans by placing Eurobonds. However, as to how successful this process is not known. Previously American and European authorities encouraged their banks to refrain from participation in the underwriting of Russia.

The Ministry of Finance plans to clarify the parameters of this year’s budget in mid-April.