Russia faces $39 B budget gap in 2020 from lower oil, gas revenues
Russia’s budget revenues from oil and gas sales are set to be 3 trillion roubles ($39 billion) lower than previously expected this year due to the slump in crude prices, Finance Minister Anton Siluanov said.
Siluanov’s had initially estimated a 2 trillion rouble shortfall, with a deficit that could reach 0.9% of gross domestic product (GDP).
Oil prices fell for a third session on Wednesday to be down about 17% so far this week as the outlook for fuel demand darkened because of travel and lockdowns in place to curb the spread of the coronavirus epidemic.
Prices for Brent crude, a global benchmark for Russia’s main export, were down 1.25% at $28.41 a barrel by 0832 GMT.
Despite the expansion of the deficit, Gazprombank analysts said the finance ministry has sufficient reserves to carry out its spending, including with its National Wealth Fund.
The Fund “has enough to cover for the shortfalls in income from lower oil prices for more than five years,” the bank said in a note.
As of March 1, the NWF held 8.2 trillion roubles, or 7.3% of GDP, according to the ministry.
The ministry has said that the country could weather oil prices of $25 to 30$ per barrel for between six and 10 years.
The Kremlin said last week that Russia’s economy had sufficient international reserves and was sufficiently robust to weather any temporary market instability.
$1 = 76.9130 roubles Reporting by Darya Korsunskaya; Writing by Andrey Ostroukh and Gabrielle Tétrault-Farber; Editing by Katya Golubkova and John Stonestreet
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