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No need to use National Wealth Fund to cover budget deficit — minister

June 17, 2016, 10:34 UTC+3 ST. PETERSBURG

The Russian economic development minister says there is a great range of opportunities, positions with the Finance Ministry are close on the domestic market borrowing

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Russian Minister of Economic Development Alexei Ulyukayev

Russian Minister of Economic Development Alexei Ulyukayev

© Artiom Korotaev/TASS

ST. PETERSBURG, June 17. /TASS/. There could be no need to use the money from the Russian National Wealth Fund to cover the budget deficit in 2017, Minister of Economic Development Alexei Ulyukayev told journalists on Friday.

"We have a great range of opportunities. I personally believe that we have not used the Fund," the Minister said.

Ulyukayev added that there are great opportunities in borrowing. "Our positions with the Finance Ministry are close on the domestic market borrowing. Thus, net borrowings in the amount of about 1.5% of GDP are quite possible. There are the next years - 2017, 2018," he said, adding that Russia’s budget deficit may be reduced by 0.5% percentage points each year to reach 1.5% of GDP by 2019.

"I think we can accurately cut the budget deficit at the rate of 0.5% per year and reach 1.5% by 2019," he said.

Commenting on this year's situation, the minister said Russia’s GDP growth may total 0.2-0.3% in 2016 in case the current market environment persists.

"I think in case the current market environment persists there will be a slight growth - 0.2-0.3% of GDP plus," he said.

Foreign borrowing

Ulyukayev considers it necessary to keep the possibility of borrowing abroad for the country for future years at the level of $3 bln.

"Unlike our colleagues from the Finance Ministry we think that foreign borrowings are quite possible as well. I think (this possibility in the legislation - TASS) should obviously be kept," he said, adding that Russia "has a lot of possibilities, which will be used depending on the situation."

Draft budget for 2017

According to the minister, Russia’s draft budget for 2017 may be based at the oil price above $40 per barrel.

 The minister added that average annual price of oil in 2016 could reach $43 per barrel at the current market situation.

"If we take the current level, the annual average Urals price will be at $43 per barrel," he said.

Rosneft privatization

The minister went on to say that selling a part of Rosneft on a stock market is theoretically possible, but not ideal.

"It is theoretically possible, but probably this is not an ideal option. We will listen to the consultant’ position. We have the consultant's recommendations, we will be working with them," he said.

The minister did not comment on the contents of these recommendations.

Head of Rosneft Igor Sechin said earlier that it would be reasonable to consider various options for privatization of Rosneft in the current difficult situation, including attracting strategic investors.

According to Ulyukayev, privatization of 19.5% stake of the Russian oil major Rosneft may provide the budget with 700 bln rubles ($10.5 bln).


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