Russian Budget Deficit for 2016 'Will Not Hurt Macro-Economic Stability'

Russia’s budget deficit for 2016 is completely attainable because it will not damage the country’s macro-economic stability, Russian Economic Development Minister Alexei Ulyukayev said Tuesday.

PARIS (Sputnik) – Ulyukayev said, however, that expenditures must be gradually reduced in the future.

“We understand that a deficit of 3 percent [GDP] is attainable in the macro-economic sense with clear sources of financing and this is the lesser of evils,” Ulyukayev told journalists.

“Having a concept of budget revenue that is formed from the oil industry, we need to find the correct balance between reducing expenditures and the deficit level that will allow us macro-economic stability. It seems to me that a rate of 3 percent [of GDP] for 2016 is a reasonable compromise between these two positions,” Ulyukayev said, adding that “in the future the deficit level needs to be decreased gradually year by year.”

The minister added that the government would most likely avoid having to reduce expenditures and could remain at the same level of 2015 for next year, but additional expenditures would have to be waived.

“Expenditures won’t need to be changed from the figures of 2015. Everything that was in the three-year [plan] will of course need to be reduced slightly,” Ulyukayev added.

Russian inflation for 2015 will most likely stand at the earlier forecasted 11.9 percent, Ulyukayev said.

“I think that we can confirm the forecast that we had back in April and that’s 11.9 percent, and there’s a high level of probability and it seems that the final numbers will be close to that level,” Ulyukayev told journalists.