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Russia Can Achieve Zero Deficit At $100 Oil in 2015 - Kudrin

Russian Oil Well
MOSCOW. July 7 (Interfax) - Russia could achieve a zero budget deficit in 2015 if oil trades at $100 a barrel, Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, said.

"It would be easier to do at $100 but harder to balance at $90," he said.

Kudrin noted that the Russian economy is still dependent on oil prices. The country's budget for this year was balanced earlier at $115/barrel oil, the finance minister said. That figure has now been revised upwards to $118, he said. "I can now specify somewhat - $118 per barrel," he said.

In the coming three years, the oil prices at which Russia can balance its budget will be higher than this year, Kudrin said. The figure for next year is $124.6 per barrel, for 2013 - $125.2, and for 2014 - $125.7.

Plans announced earlier for bringing the budget deficit to zero in 2015 will be hard to achieve if oil is going for $90 per barrel, Kudrin said. "That would be complicated. Getting to a zero deficit at $100 per barrel is not difficult," he said, adding that a balanced budget that year is quite possible.

Kudrin said it might be possible to balance the budget in 2015 at $90 oil if structural reforms are carried out, including in the public sector, where money might be spent more effectively, and less of it.

"These decisions have not yet been reached, and essentially this will be for the next government to decide and approve when drafting budgets for the years that follow," Kudrin said.

The issue of narrowing the budget deficit has always been a fundamental one for Russia, which us depends a lot on oil and gas revenue.

Kudrin said 47% of this year's spending would be covered by oil and gas revenue. "By 2014, according to the parameters we have submitted, 38% of spending will be covered by oil and gas revenue, so we'll always be interested at what oil price we can achieve a balanced budget," he said.


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