April 5, 2012 / 8:32 PM / 6 years ago

IMF warns of economic overheating risks in Russia

WASHINGTON (Reuters) - Russian economic growth is running at or ahead of its potential and there is a risk of overheating from a planned increase in the 2012 non-oil budget deficit, an International Monetary Fund spokesman said on Thursday.

“The budgeted increase in the non-oil deficit of 2012 poses a risk of overheating,” IMF spokesman Gerry Rice told a briefing for reporters. “We believe the government should take advantage of high oil prices by reducing its non-oil deficit and saving windfall oil revenues in the reserve fund.”

The IMF has urged the Russian authorities to cut the non-oil budget deficit this year by curtailing subsidies and tax exemptions, and aim to reduce the deficit by 2015 to 4.7 percent of gross domestic product.

Russia’s non-oil deficit is estimated at between 10 and 11 percent of GDP this year.

Reporting by Lesley Wroughton; Editing by James Dalgleish

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