US declaration on UN reform is not organization’s document - LavrovRussian Politics & Diplomacy September 24, 13:34
US not to strike on DPRK as it is aware Pyongyang has nuclear weapon - LavrovRussian Politics & Diplomacy September 24, 13:32
US forces assist Syrian opposition force in crossing IS positionsRussian Politics & Diplomacy September 24, 12:55
Putin discusses Russia’s economy growth with ministersBusiness & Economy September 24, 2:38
Lavrov warns against partition of SyriaRussian Politics & Diplomacy September 23, 0:00
Lavrov calls to coordinate Russian, US military action in SyriaRussian Politics & Diplomacy September 22, 21:05
Lavrov blames Obama administration for souring Russia-US tiesRussian Politics & Diplomacy September 22, 20:41
Waging war on Korean Peninsula inadmissible, says LavrovRussian Politics & Diplomacy September 22, 20:36
Russian Northern Fleet completes drills in ArcticMilitary & Defense September 22, 18:01
ST. PETERSBURG, June 16. /TASS/. It is necessary to reduce to zero Russia’s budget imbalance and ensure its full adjustment to the new environment, Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum (SPIEF-2016) on Thursday.
"As for operational targets the first thing is to adjust the budget to the new realities. The (Russian) economy has adjusted, business has adjusted, banks have also adjusted backed by the state aide. We’re facing a huge imbalance of revenues and (budget) expenditures. The key operational target is to reduce this imbalance to zero within three years," he said.
According to Siluanov, investors and market participants need to have a clear idea of the measures that the state is going to assume - to raise taxes or eliminate the budget imbalance and improve the tax system to stimulate the economic development. "This is the key thing and the issue of adjusting the budget to the new environment," he said.
According to Siluanov, Russia’s Finance Ministry will not use the whole of the Reserve Fund and will keep a safety cushion.
"We’ll keep the Reserve Fund, won’t use the whole of it. That’s why we’ll be reducing the expenses of the Reserve Fund within the next three years keeping a safety cushion and gradually boosting the volume of domestic borrowings," Siluanov said, adding that the issue is not about borrowings in foreign exchange and it is only possible to finance the budget using domestic borrowings.
The Reserve Fund resources will depend on the situation on international market and delivery of privatization plans, he added.
"This will depend on the privatization progress and the situation with our export goods on international markets," the minister said.
In May, Russia’s Reserve Fund decreased by 11.8% to 2.5 trillion rubles ($38.9 bln) while the National Wealth Fund grew by 1.5% to 4.823 trillion rubles ($75.2 bln).
In the foreign currency equivalent the funds’ amounts decreased - the Reserve Fund decreased from $44.96 bln to $38.6 bln, the National Wealth Fund decreased from $73.86 bln to $72.99 bln.
The minister said Russia’s budget deficit will be around 3% in 2016 depending on the situation.
Earlier President Putin set the task of staying within 3% budget deficit this year.
"We’re aiming at budget deficit of up to 3% of GDP at $40 per barrels oil price," Siluanov said, adding that the ministry "has prepared proposals on budget consolidation and will submit them in the autumn." "The budget deficit will be around 3% depending on the international economic environment," he added.
The current target for budget deficit stands at 3% of GDP though it may go up to 3.3%-3.4% of GDP.
According to Siluanov, Russia is able to provide good returns to investors against still high risks.
Investors assess risks and opportunities when evaluation options for placement of funds, the minister said. "Opportunities in Russia are good. We see good earnings can be made in Russia and returns will be sound. What about risks? These are fairly high so far," Siluanov said.
According to Siluanov, the Finance Ministry may use resources of the National Wealth Fund (NWF) to cover Russia’s budget deficit in 2017.
"We will use resources of the NWF if required in the next year. If resources of the Reserve Fund are depleted, then the NWF is also a similar reserve fund. A portion of the NWF will be left to finance budget gaps," the minister said.