Latest news with #AntonSiluanov
Reuters
6 days ago
- Business
- Reuters
Russian finance minister returns to idea of adjusting oil price budget rule
May 28 (Reuters) - Finance Minister Anton Siluanov said on Wednesday an adjustment to the $60 oil cut-off price for Russia's budget rule should be considered, marking a potential policy shift that could impact Moscow's ability to raise spending and build up cash reserves. Under the budget rule, the Finance Ministry sells foreign currency from its rainy-day National Wealth Fund to make up for any shortfall in revenue from oil and natural gas exports, or makes purchases in the event of a surplus. While Siluanov had previously spoken in favour of the cut-off price being changed, he recently ruled out an adjustment for the next three-year budget. Responding to a lawmaker's question about Russia's depleting reserves on Wednesday, he appeared to change tack once more, saying the issue would be discussed when formulating budget policy. "We need to think about whether, when preparing the new budget for the medium-term, we should look at the cut-off price level ... to what extent it corresponds today to levels that allow us to ensure not only the preservation of the National Wealth Fund, but also its replenishment," Siluanov said. Russia's fiscal buffers have dwindled since its February 2022 invasion of Ukraine, with Moscow dipping into the wealth fund to finance budget deficits and support state-owned companies. The fund's liquid assets stood at $40.4 billion on May 1, down from $112.7 billion before the invasion. High prices for oil, the cornerstone of Russia's export-focused economy, enable Russia to set funds aside, but with Brent futures having dropped to about $60 a barrel and Urals crude even lower, Moscow's finances are under pressure. A lower cut-off price would allow Russia to save more petrodollars, but that also implies reduced expenditure, which, as analysts have noted, may be hard to achieve with Moscow spending heavily on the war in Ukraine.
Qatar Tribune
07-05-2025
- Business
- Qatar Tribune
Russia plans to employ fiscal reserves to balance 2025 budget
Agencies The Russian government plans to use its fiscal reserves for 447 billion rubles ($5.51 billion), or about one-tenth of its liquid assets, to balance the budget in 2025 after a threefold increase in the deficit, according to the country's finance minister on Tuesday. The Finance Ministry raised the 2025 budget deficit estimate to 1.7% of gross domestic product (GDP) last week from 0.5% after reducing the energy revenues forecast by 24% due to expectations of a prolonged period of low oil prices. The move, taken as global oil prices hit their lowest level in four years, reversed the ministry's initial plan to replenish the reserve National Wealth Fund (NWF) this year and forced it to look for sources to cover the deficit instead. 'Overall for the year, based on forecast data from the Ministry of Economy, which we used as a basis for the federal budget adjustment, we expect to use 447 billion rubles from the National Wealth Fund (NWF),' Finance Minister Anton Siluanov told a news conference. The liquid assets of the NWF stood at 3.3 trillion rubles, or $39 billion, last month after dropping by about two-thirds since the start of the war in Ukraine in 2022. The fund is projected to receive over 1 trillion rubles in extra revenues from said the government was not planning any emergency measures such as raising taxes this year. Neither is the ministry planning to increase its borrowing plans. Siluanov earlier said defense spending will not be touched. 'This year, I hope we will manage without taking extraordinary measures during the budget execution process,' he said. Many economists, however, see such measures as inevitable in the coming years. Seeking ways to counter the oil price shock, Siluanov proposed to save more oil revenues by lowering the 'cutoff' price of oil, above which all energy revenues are set aside for a rainy day, in the next three-year draft budget. The initiative would have ensured at least a three-year coverage of budget spending if the oil price remains low for an extended period, but also implied a reduction in spending as the military operation in Ukraine continues. Siluanov's comments on Tuesday suggested the idea was shelved for the time being. With the current cutoff price at $60 per barrel, at the projected average price for Urals blend at $56 this year, no money can flow into the fund. 'In the projections for the next three-year budget, a change in the cutoff price will not be provided for,' he said. Russia is the world's second-largest oil exporter, with energy making up one-fifth of the budget's total revenues. U.S. President Donald Trump said on Tuesday that with lower oil prices, Russia is more eager to settle the Ukraine war. The strong ruble, which has rallied by about 40% against the U.S. dollar this year, mostly on expectations of a peaceful settlement in Ukraine in an unprecedented decoupling from the oil price, has added to the budget woes. The oil price calculated in rubles fell in early May to a two-year low below the 4,000 ruble per barrel mark, about 40% lower than planned in the budget, according to Reuters calculations. Siluanov said stalled imports, as domestic buyers of foreign goods struggle to secure loans at high domestic interest rates and face international payment problems caused by Western sanctions, were a key factor behind the rouble's strength.
Russia Today
02-05-2025
- Business
- Russia Today
EU to tap frozen Russian funds
Belgium-based clearing house Euroclear is set redistribute around €3 billion ($3.4 billion) of frozen Russian funds, Reuters reported on Friday. The money will reportedly be used to compensate Western investors whose assets are stranded in Russia. The Kremlin has repeatedly warned that doing so would amount to 'theft,' contravening international law. A number of Western states froze an estimated €264 billion worth of Russian sovereign and private funds following the escalation of the Ukraine conflict in February 2022. Around €200 billion is currently held by Euroclear. The assets have already generated billions in interest, of which €1.55 billion was transferred to Ukraine in July 2024. Euroclear will redistribute €3 billion from a pool of €10 billion in cash belonging to Russian entities and individuals blacklisted by the EU as part of Ukraine-related sanctions, according to two sources cited by the news agency. 'We received authorization from our competent authority to unfreeze the compensation amounts and make these available to our participants,' Reuters cites a briefing document dated April 1 as saying. The agency noted that changes to the bloc's sanctions regime, adopted late last year, allow for these disbursements to Western investors. According to two Reuters sources, Moscow has recently seized €3 billion held by Euroclear at a depository in Russia to compensate Russian investors affected by Western sanctions. In November, Russian Finance Minister Anton Siluanov said that Moscow would use the income from the frozen assets of Western investors in response to similar actions by the West. The issue of confiscating frozen Russian assets has been debated by EU lawmakers for more than three years, but member states have so far failed to arrive at a consensus. EU foreign policy chief Kaja Kallas has repeatedly called for the funds to be tapped and transferred to support Ukraine's reconstruction. Last month, she acknowledged that some member states still oppose the move. The Russian authorities have initiated around 100 court actions against Euroclear, one source told Reuters, without providing details on their status. Moscow has condemned the asset freeze, arguing that it violates international law and undermines the global financial system. The Kremlin previously stated that it plans to launch legal action against those involved in the seizure of its assets.
Russia Today
01-05-2025
- Business
- Russia Today
Russia forecasts major increase in budget deficit
Russia's budget deficit is set to soar to more than three times the government's original target for 2025, according to the Finance Ministry. The revised outlook comes amid falling global oil prices and escalating trade tensions worldwide. Last month, Finance Minister Anton Siluanov warned of potential budgetary stress due to declining oil revenues and global economic instability, saying the ongoing trade wars, which are reducing export opportunities for many countries including Russia, remain a major risk. This year, the overall fiscal deficit is forecast at 1.7% of GDP, compared to the previously projected 0.5%, according to a statement released by the ministry on Wednesday. In monetary terms, the budget shortfall is expected to total 3.8 trillion rubles ($46.3 billion). 'The budget priorities remain unchanged: Social support for citizens, funding for national defense and security, and assistance for the families of participants in the special military operation, ensuring the country's technological leadership' Siluanov said, commenting on the revised forecast. The ministry's economic growth outlook for 2025 remains unchanged at 2.5%, but the inflation estimate has been raised from 4.5% to 7.6% by the end of the year. The spending plan for 2025 was also increased by 830 billion rubles ($10.1 billion). The forecast for the price of Russian oil has been lowered from $69.7 to $56 per barrel. Projected oil and gas revenues will amount to 8.32 trillion rubles ($100.5 billion), or 3.7% of GDP, the ministry said. Global oil prices have been declining in recent weeks due to increased supply and economic uncertainty. Demand for oil has been weakened by the global economic slowdown, driven in part by tensions over trade. In April, oil prices dropped by more than 11%.
Reuters
30-04-2025
- Business
- Reuters
Russia raises 2025 deficit forecast threefold due to low oil price risks
MOSCOW, April 30 (Reuters) - Russia's Finance Ministry raised the 2025 budget deficit estimate to 1.7% of gross domestic product (GDP) on Wednesday from 0.5% after reducing the energy revenues forecast by 24% due to expectation of a prolonged period of low oil prices. The ministry lowered the 2025 oil and gas revenues forecast to 8.32 trillion roubles ($101.47 billion) or 3.7% of GDP from 10.94 trillion roubles or 5.1% of GDP. It also increased the spending by 830 billion roubles. Russia already hiked state spending on national defence by a quarter in 2025 to 6.3% of gross domestic product (GDP), the highest level since the Cold War. Finance Minister Anton Siluanov said defence spending will not be touched. "The budget priorities remain unchanged. These are social support for citizens, funding for the defence and security of the state, support for families of participants in the special military operation," he said in comments on the increase. Oil and gas revenue is a crucial source of cash for the Kremlin, accounting for about a third to a half of total federal budget proceeds over the past decade. The slowdown of the global economy as the result of trade wars is hitting demand for oil and pushing down its price, which fell by more than 11% in April. The announcement followed a revision of the average price of oil used in 2025 budget calculations to $56 per barrel from $69.7 previously but Siluanov insisted the spending plans will not be affected. "Everything planned in the budget, including the implementation of national development goals, will be carried out regardless of external conditions and factors," he added. ($1 = 81.9955 roubles)
