Finance Minister Anton Siluanov said Russia’s budget deficit could exceed an expected 2 percent of GDP in 2023 as oil price cuts cut export earnings, creating an additional fiscal hurdle for Moscow as it spends large sums on the war it started the war against. . Ukraine.

Russia said last week that curbing the price of its crude oil and petroleum products could cut oil production by 5-7% early next year, but no matter how deep the cuts go, Siluanov vowed spending commitments would be met, relying on to the borrowing markets and financial support of the country. reserve fund where needed.

“Is a bigger budget deficit possible? It is possible if the income is lower than planned. What are the risks in the coming year? Price risks and restrictions,” Siluanov told reporters in a comment approved for publication on Tuesday.

He said a decline in energy exports is likely as some countries shun Russia and Moscow looks to develop new markets that will affect the country’s exports.

The Russian government took out heavy loans this quarter after a few “barren” months on the Ukrainian front. Now Russia expects to use just over 2 trillion. rubles ($29.24 billion) from its treasury in 2022 as total spending exceeds $30 trillion. rubles, more than the original plan of the year.

“Since the beginning of the special operation, macroeconomic conditions have changed, inflation has increased and a large amount of resources is required to support households,” Siluanov said.

Public spending in December may increase to 1.5 trillion. rubles. As of December 1, cash on hand was $7.6 trillion. rubles or up to 5.7% of Russia’s GDP.

Meanwhile, the Russian ruble fell on Tuesday, trying to consolidate a slight recovery from last week’s fall, as the market resigned itself to the prospect of lower export earnings following restrictions on Russian oil.

The ruble has lost about 8% against the dollar over the past week and is in a month-long decline after the oil embargo and price caps took effect. The Finance Ministry said the recent decline was due to a recovery in imports.

Source: Reuters.

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