Russia's 2009 budget deficit may be $70 bln - finance minister

[D-Mack]

Russia's 2009 budget deficit may be $70 bln - finance minister

27/12/2008 16:42 MOSCOW, December 27 (RIA Novosti) - Russia will have a budget deficit of 1.5-2 trillion rubles ($52-$70 billion) in 2009, Finance Minister Alexei Kudrin said Saturday.

"In 2009, the budget will have a deficit of 1.5 to 2 trillion rubles, which we will have to make up from the national Reserve Fund," Kudrin said on the Vesti TV channel.

"2009 will be the most difficult for the Russian and world economies. I cannot remember a worse year since the end of the Second World War,"he said. "This will be the worst year for the economy in modern times."

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No s*** sherlock

I wonder how long they can do that..

It looks like they desperately want to stimulate an internal economy

Russian government gives regions $700 mln to buy vehicles
12:43 | 27/ 12/ 2008

MOSCOW, December 27 (RIA Novosti) - The Russian government has allocated 20 billion rubles ($706 million) for regional authorities to buy buses and other vehicles, the regions minister said on Saturday.

Victor Basargin said half the money would pay for new buses, while the rest would be spent on municipal vehicles and road-building equipment. He stressed that all the vehicles should be made in Russia.

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[BadJuju]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

He stressed that all the vehicles should be made in Russia.

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A side note, but that would be further incentive for Japan to forgive the debt of the U.S. to stimulate the automobile trade.

[c1ue]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

This isn't news - Kudrin was already warning of a Russian federal budget deficit way back in October:

http://www.theotherrussia.org/2008/1...-into-deficit/

While $50B-$70B is bad - given that oil revenues are between 1/3 and 1/2 of total budget - it is not surprising given the present low price for oil (and other commodities). The Stabilization Fund is intended to perform this task - of course should oil prices stay under $50 for more than 1 year, then the situation gets ugly.

On the other hand, looking at some old data:

http://www.globalsecurity.org/milita...sia/budget.htm

You'll note Russia's budget expenditures have grown from 4.281T rubles in 2006, to 5.615T rubles in 2007, to a projected 6.570B rubles in 2008, to a projected 7.451T rubles in 2009. The last 2 numbers were clearly wrong; in May 2008 Russia spent more by adding a supplemental budget of $5B (at 24 rubles/dollar).

Separate confirmation: 2007 budget: 5.464T rubles

http://www.globalinsight.com/SDA/SDADetail7630.htm

Actual spending: 20% increased from original budget: 6.557T rubles?

http://www.mfat.govt.nz/Foreign-Rela...port-dec07.php

2008 budget: 1T rubles military spending = 15.5% to 16% of total budget

http://www.washingtontimes.com/news/...tary-spending/

Separate confirmation: 2009 budget: 9T rubles

http://www.forexyard.com/reuters/pop...UDRIN-UPDATE-2

As for the vehicle thing - part of it is internal stimulus, the other part is the other hand giving what one hand has taken away with the recent import tax surge on vehicles.

Japan is loudly protesting this move; as I noted in a different post - a difficulty in exporting used Japanese cars is going to have another knock-on effect on Japan's car industry and overall economy.

[D-Mack]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

This isn't news - Kudrin was already warning of a Russian federal budget deficit way back in October:

http://www.theotherrussia.org/2008/1...-into-deficit/

While $50B-$70B is bad - given that oil revenues are between 1/3 and 1/2 of total budget - it is not surprising given the present low price for oil (and other commodities). The Stabilization Fund is intended to perform this task - of course should oil prices stay under $50 for more than 1 year, then the situation gets ugly.


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With 12 billions a week it won't take long

Russia's international reserves down $12.6 bln in week

Russia sets aside $340 bln for anti-crisis package
20:48 | 29/ 12/ 2008


MOSCOW, December 29 (RIA Novosti) - Russia's government has earmarked 10 trillion rubles ($340 billion) for an anti-crisis package which is comparable to the country's annual budget, the government's press office said on Monday.

"In total, 10 trillion rubles have been set aside for anti-crisis measures. This money will come from the federal budget, the Central Bank and reserve funds," the press office said.

This is almost double the amount of Russia's overall reserves. As of December 1, Russia's Reserve Fund was 3.6 trillion rubles ($123 billion) and National Wealth Fund, 2.1 trillion rubles ($72 billion).

The government is also ready to provide 92 billion rubles ($3 billion) from the federal budget in financial assistance to the so-called core enterprises, as well as up to 200 billion rubles (about $7 billion) worth in state guarantees.

The government issued on Thursday a list containing the names of 295 companies that will receive state support, including companies working in transport, energy, oil and gas, communications, media and other sectors.

Russian Finance Minister Alexei Kudrin said on Saturday the country would have a budget deficit of 1.5 trillion to 2.5 trillion rubles ($52 billion to $87 billion), which is almost 6% of GDP.

But he said spending would not be cut even if oil prices plunged below $20

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[phirang]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

So does the IMF bailout Russia in 2009 or 2010?

[c1ue]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

With 12 billions a week it won't take long

True, but long before that, Russia will have repossessed the Ukraine and a few other former Soviet possessions.

http://www.radionetherlands.nl/news/...pute-continues

What interesting is that the Ukraine is complaining about Gazprom raising natural gas prices to $400 per 1000 cubic meters.

The previous gas dispute was a price increase from $5 to $230 per 1000 cubic meters

http://news.bbc.co.uk/2/hi/business/4569846.stm

Of course, Western Europe is paying around $400 per 1000 cubic meters now, but that number is also slated to increase.

Thus the falling oil price doesn't seem to mark a falling cost to all commodities Russia exports.

All because of a strategic relationship with Algeria...

[phirang]

Re: Russia's 2009 budget deficit may be $70 bln - finance minister

True, but long before that, Russia will have repossessed the Ukraine and a few other former Soviet possessions.

http://www.radionetherlands.nl/news/...pute-continues

What interesting is that the Ukraine is complaining about Gazprom raising natural gas prices to $400 per 1000 cubic meters.

The previous gas dispute was a price increase from $5 to $230 per 1000 cubic meters

http://news.bbc.co.uk/2/hi/business/4569846.stm

Of course, Western Europe is paying around $400 per 1000 cubic meters now, but that number is also slated to increase.

Thus the falling oil price doesn't seem to mark a falling cost to all commodities Russia exports.

All because of a strategic relationship with Algeria...

Heh, Gazprom spreads say otherwise.