Russia's Finance Ministry has called for a limit on the 'non-energy' budget deficit, or deficit which excludes revenues from its key oil and gas exports, to 4-5 % of gross domestic budget (GDP) in 2012-2014, Finance Minister Alexei Kudrin said on Wednesday.
The government planned to cut its non-energy deficit to 3.7% of GDP before the international financial crisis hit the country hard.
"Now we have (a deficit) of 13.9%, we need to go down to 4-5% again. We need a transition period as a result of which we must return to limiting the non-energy deficit level. I think we will make such proposals by spring, for the new 2012-2014 budget cycle," Kudrin told a financial forum.
Before the crisis, Russia directed all its oil and gas revenues to the Stabilization Fund, and subsequently to the Reserve Fund and the National Welfare Fund. Only part of those revenues was channeled to the federal budget to cover the deficit. Now oil and gas revenues are fully used to cover the budget deficit.
Kudrin also said that Russia had had to use more reserves than other countries used to cushion the crisis and start an upward trend.
"Being seriously dependent on oil, Russia must return to fiscal rules which limit non-energy budget deficits," Kudrin said, adding that during the crisis Russia had demonstrated a deeper fall in some economic indicators compared to other countries because it was still strongly dependent on oil.
"The fiscal gap amounted to 12% of GDP," he said, adding that Russia had slid to a budget deficit of 5-6% of GDP at an oil price of about $70 per barrel, from a budget surplus of 5-6% at about the same oil price.
"We are still in a situation when key distortions are not solved," Kudrin said, adding that before the crisis government had spent 6.7-7.0% of energy revenues, while now it spent 13-14%.
"This is an unprecedentedly high figure," he said.
MOSCOW, November 24 (RIA Novosti)
