2 Min Read
(Adds quotes, detail)
MOSCOW, Oct 12 (Reuters) - Russia's proceeds from selling stakes in state companies will fall in the next few years, prompting Moscow to borrow more to prevent state funds from running out, Finance Minister Anton Siluanov said on Wednesday.
Facing a rapid drop in the price of oil, Russia's key export, Moscow had to uncork its Reserve Fund this year but is now running out of ways to plug budget holes.
"We can't endlessly spend our reserves," Siluanov told an economic conference.
The finance ministry will cut spending from the Reserve Fund to keep it at a "sufficient level" in the next three years, Siluanov said without elaborating.
Previously, the finance ministry had said it would burn through the Reserve Fund by next year, which was accumulated over years of high oil prices and stood at $32.3 billion as of Oct. 1.
This year, Russia will also use proceeds from selling stakes in state companies to cover budget spending. Russia has already raised 52 billion roubles ($835 million) by selling a stake in diamond company Alrosa.
It plans to raise a total of up to one trillion roubles by the end of the year, with sales including a stake in the country's top oil producer Rosneft and mid-size oil firm Bashneft.
Looking forward, Russia does not have ambitious privatisation plans: the 2017 budget envisages 130 billion roubles in proceeds from the sale of stakes in the country's No.2 lender VTB and shipping company Sovcomflot, Siluanov said.
"When preparing budgets for 2018-2020 there is a need to go back to it (privatisation) to lower spending of reserves on one hand, and to lower the share of state presence in the economy, on the other," Siluanov said.
Alexei Ulyukayev, Russia's Economy Minister, was more optimistic about privatisation prospects. He told the same economic conference that Russia may raise up to 300 billion roubles a year from selling stakes in state companies.
$1 = 62.2255 roubles Reporting by Alex Winning and Katya Golubkova; Writing by Andrey Ostroukh; Editing by Toby Chopra