Russia's 2009 budget deficit lower than expected

The federal budget deficit of Russia would account for 6.9 percent of its Gross Domestic Product(GDP) this year, which was lower than expected, said Russian finance minister Wednesday.

Taking into consideration factors including oil price and exchange rate policy, the federal budget revenue of 2009 would slash by 25 percent as compared with last year, thus the budget deficit would take up 6.9 percent of the annual GDP, said Deputy Prime Minister and Finance Minister Alexei Kudrin.

Although its federal budget revenue shrank remarkably, Russia would maintain the majority of the budget spending in order to alleviate current market situations, he said at the Federation Council, or upper house of the parliament.

This year some 2.82 trillion rubles (around 98 billion U.S. dollars) would be allocated from Russia's reserve fund to the federal budget, he said, and next year some 1.8 trillion rubles (around 62.5 billion dollars) too.

The Russian government also planned to allocate additional money from its national welfare fund, he said.

According to the federal law signed by President Dmitry Medvedev in October, Russia's budget deficit of 2009 would be equal to 7.7 percent of its annual GDP, surpassing 3 trillion rubles (104 billion dollars).

Russia's reserve fund and national welfare fund were established separately in last February. The reserve fund may be used to supplement government finance and pay for debts, while the national welfare fund may be used to offset deficiency of retirement pensions.

As of Oct. 1, Russia had a reserve fund of 2.298 trillion rubles (80 billion dollars), and a national welfare fund of 2.764 trillion rubles (96 billion dollars).

Source: Xinhua