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Russia faces 8 pct budget deficit, adviser says

(Agencies)
Updated: 2009-02-11 17:23

MOSCOW -- Russia's budget deficit could swell to 8 percent of national output in 2009, costing the country half of its $130 billion reserves, the presidential economic adviser said Wednesday.

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The figure given by Arkady Dvorkovich in a speech to a business forum was higher than previous predictions. Last week, Dvorkovich said the deficit would likely be around 6 percent of gross domestic product.

To compensate for the deficit, Russia this year will use about half of the approximately 4.7 trillion rubles ($130 billion) it has salted away in a reserve fund, Dvorkovich said.

"Approximately, we can spend half of the reserve fund to cover the budget deficit, which is quite okay given that we have more time for adjustment of the budgets for 2010 and 2011," he said.

The reserve fund accumulated huge amounts of money during recent years when world oil prices were high.

However, prices in recent months have plummeted to about half the $70 per barrel level upon which the 2009 budget was balanced.