MOSCOW Oct 6 The Russian government approved an
amended 2016 budget on Thursday that envisages a larger deficit
because oil prices have been weaker than officials had hoped.
Russia's 2016 budget was initially based on an average price
of $50 per barrel for its Urals oil.
It has been amended to assume an oil price of $40, the
average for Russia's main crude export blend Urals URL-E in
the first nine months of this year, according to finance
A proposed output cut announced last week by the
Organization of the Petroleum Exporting Countries (OPEC) has
helped to boost prices for benchmark Brent crude in recent days,
although a global supply glut has been weighing on the
Sergei Donskoi, natural resources minister, told journalists
the budget changes had been approved at a government meeting but
did not elaborate.
Weak oil prices have added to pressure on Russia's public
finances from Western sanctions over the Ukraine conflict.
The amended budget must still be approved by Russia's two
houses of parliament and President Vladimir Putin before it
According to the version approved on Thursday, the deficit
this year will be 3.03 trillion roubles ($49 billion), or 3.7
percent of gross domestic product, up from earlier plans for a
deficit of 3.0 percent of GDP.
State revenues this year are now seen around 369 billion
roubles lower than previously planned, at 13.37 trillion
roubles. Total spending is seen at 16.40 trillion roubles.
The finance ministry expects to use proceeds from the sale
of government stakes in mid-sized oil producer Bashneft
and top oil firm Rosneft to cover part of
this year's deficit.
It will also use 2.1 trillion roubles from one of Russia's
two sovereign funds, the Reserve Fund, and increased borrowing
to cover the deficit.
Russia plans net domestic borrowing of 500 billion roubles
this year, well above the 300 billion roubles pencilled into
original budget plans.
($1 = 62.3700 roubles)
(Reporting by Darya Korsunskaya and Elena Fabrichnaya; Writing
by Lidia Kelly; Editing by Alexander Winning/Ruth Pitchford)