Russia expects first deficit in a decade

Russia will run a budget deficit in 2009 for the first time in a decade as low oil prices take their toll on government revenue, a Kremlin official said Wednesday, the state RIA-Novosti news agency reported.

Arkady Dvorkovich, the president’s economic adviser, said the size of the deficit was not yet clear but it would be covered by the reserve fund – money put away for a rainy day when oil prices were soaring.


The business newspaper Vedomosti reported Wednesday that next year’s budget deficit could be 5 percent or more. The report cited unidentified officials in the Finance Ministry and other government agencies.

The 2009 budget was based on an average oil price of $95 per barrel. A revised macroeconomic prognosis completed last week brought the expected oil price down to $50, but oil is currently trading below $40.

AP