Even if the government would take measures for the deficit reduction, it will still be high, said ex-Finance Minister of Russia Alexei Kudrin. According to him, the rate may exceed the maximum permissible level specified in the current budget.
MOSCOW, 21 Jan. The budget deficit of the Russian Federation in 2016 may be about 4% of GDP, taking into account the government’s efforts to reduce expenditure, says ex-Finance Minister of Russia Alexei Kudrin.
“I think the government will take measures to reduce the deficit. It will still be high, you can expect four or more percent, depending on the measures associated with the reduction in spending will be implemented,” — said Kudrin in an interview with Business FM.
The current law on the Federal budget for the current year based on the estimation of the expected average annual oil price in 50 dollars per barrel and assumes a deficit of 3% of GDP. The government has previously stressed that this level of deficit is Russia’s maximum allowable.
Earlier, speaking at the world economic forum in Davos, Kudrin said that the budget deficit of the Russian Federation with an average annual oil price of about $ 30 per barrel will be about 6% of GDP. “It would certainly be less than six (per cent of GDP — ed.). Six is calculated, taking into account the falling revenue caused by a fall in oil prices,” said Kudrin.
According to him, the government will have much more use of Reserve Fund, to increase borrowing on the domestic market, as well as to take measures to reduce costs. However, he did not rule out that if the government decide that they have insufficient funds for the fulfillment of social obligations and other important expenses, there may be a change in the tax system.
“Most likely, already in the calculation for the next year, it will happen in the autumn of of taxes which will come into effect from next year,” he said. Currently Russia has declared the President of the Russian Federation the moratorium on the increase in the tax burden until 2018.