Russia plans to cut its budget
deficit to 2.9 percent of gross domestic product by 2013 as it
sells state assets and increases taxes, Finance Minister Alexei Kudrin said.
The government plans to raise 883 billion rubles ($29
billion) by selling minority stakes in state-owned companies
over the next three years, Kudrin told reporters late yesterday
in Moscow. It may sell a holding in OAO Rosneft, Russia’s
largest oil producer, within three to five years, he said.
Russia posted a budget deficit of 5.9 percent of GDP last
year, its first shortfall since 1999, as the economy contracted
a record 7.9 percent. In addition to asset sales, the government
has proposed increasing taxes on oil and natural gas extraction,
as well as copper and nickel exports, to narrow the gap.
“The economy will feel the aftermath of the deep crisis,”
Kudrin said, adding that Russia will experience “moderate”
growth from 2011 to 2013 and won’t reach pre-crisis levels of
GDP until the fourth quarter of 2012. “We’ll just be emerging
from the crisis.”
The budget gap will narrow to 3.6 percent of GDP next year
and 3.1 percent in 2012, Kudrin said. Russia’s sovereign debt
will rise to 16.3 percent of GDP in 2013 from 11.5 percent at
the end of this year to finance the deficit, he said.
“A significant part of the budget deficit will be covered
by higher borrowing,” Kudrin said.
Russia plans to borrow 1.5 trillion rubles next year, 1.3
trillion rubles in 2012 and 931 billion rubles in 2013, Deputy
Finance Minister Sergei Storchak said last month, citing
preliminary estimates in the government’s borrowing program. The
country will meet 90 percent of its borrowing needs on the
domestic market, he said.
Reserve Fund
The government will also tap its reserve fund to finance
the deficit, and a 61 percent increase in the tax on gas
extraction will raise 51.3 billion rubles next year, Kudrin
said.
At the same time, the government plans to spend 2.98
trillion rubles from 2011-2013 to cover the pension fund
deficit, he said.
The Finance Ministry has proposed selling minority stakes
in companies including Russia’s two largest lenders OAO Sberbank
and VTB Group, OAO Russian Railways, shipper OAO Sovcomflot, the
OAO RusHydro utility, Russian Agricultural Bank and OAO Agency
for Housing Mortgage Lending.
Sales of stakes in Russian Railways and the Agency for
Housing Mortgage Lending may be delayed for two to three years,
Kudrin said yesterday. He declined to name other companies in
which the government plans to sell stakes, saying the list
hasn’t been completed. The asset sales plan should be clarified
in September, with the list finished by year end, he said.
To contact the reporter on this story:
Maria Levitov in Moscow at
mlevitov@bloomberg.net
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