Russia expects budget surplus of 0.45% GDP instead of 1.3% deficit in 2018 — draft

Russia’s fedral budget may get a surplus of 0.45% of GDP this year instead of previously expected deficit of 1.3% of GDP, according to this year’s amended draft federal budget for 2018.

The 2018 budget surplus may amount to 440.6 billion rubles, instead of previously expected deficit of 1.27 trillion rubles.

The Finance Ministry also lowered its projected inflation levels, to 2.8% from the previously expected 4% The Russian Central Bank earlier said that inflation is expected within the interval of 3-4% this year and at about four percent next year.

The ministry also revised its estimated Russian budget revenues for 2018, from 15.157 trillion rubles to 17.032 trillion rubles.

The amended budget also increases projected additional oil and gas revenues nearly fivefold, to 2.74 trillion from the previously estimated 527.6 billion.

The bill envisions a transition to the new budget rule (mechanism of Russia’s budget formation, determines the maximum level of spending on the basis of oil prices - TASS). Starting 2018, additional oil and gas revenues received from the price of Urals crude oil above the base of $40 per barrel in 2017 prices, will be allocated on reserves instead of expenditures. The base price will be adjusted by 2% annually starting 2018.