Latest news with #Siluanov
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.
Reuters
06-05-2025
- Business
- Reuters
Russia plans to tap fiscal reserves to balance 2025 budget, finance minister says
Summary Companies The move comes after threefold 2025 deficit increase Oil prices hit lowest level in four years Siluanov sees no extraordinary measures to balance budget in 2025 Rouble expected to weaken when interest rates decrease MOSCOW, May 6 (Reuters) - The Russian government plans to tap its fiscal reserves for 447 billion roubles ($5.51 billion), or about 1/10th of their liquid assets, to balance the budget in 2025 after a threefold increase in the deficit, the finance minister said on Tuesday. The finance ministry raised the 2025 budget deficit estimate to 1.7% of gross domestic product 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 roubles from the National Wealth Fund," minister Anton Siluanov told a news conference. The liquid assets of the NWF stood at 3.3 trillion roubles, 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 roubles in extra revenues from 2024. NO EMERGENCY MEASURES Siluanov 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 defence 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 "cut-off" 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 cut-off 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 cut-off 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. CHEAP MONEY The strong rouble, 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 roubles fell in early May to a two-year low below the 4,000 rouble 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. Sales of foreign currency, predominantly the Chinese yuan, from the National Wealth Fund, which resumed in April to cover the budget shortfall, have also supported the rouble in recent weeks. Siluanov said that eventual monetary policy easing will enable importers to take more loans and push the rouble lower. A weaker local currency generally helps to fill state coffers for exporting countries. "If the money becomes cheaper, it will affect the exchange rate," Siluanov said, pledging that there will be no changes to the foreign currency regulation, which includes mandatory sales of foreign currency by exporting companies. ($1 = 81.1455 roubles)
Reuters
06-05-2025
- Business
- Reuters
Russia's 2025 budget does not assume receipt of any Gazprom dividend, minister says
MOSCOW, May 6 (Reuters) - Russia's budget planning does not assume that state-owned energy giant Gazprom ( opens new tab will pay out a dividend this year, Finance Minister Anton Siluanov told reporters on Wednesday. Gazprom's directors usually convene in the second half of May to recommend a dividend ahead of a shareholder meeting in June. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. The absence of a dividend, if confirmed, will add to the problems of the government, which owns just over half of Gazprom's share capital at a time when it is confronting falling oil and gas revenues, high inflation, high military spending and a budget deficit. "We do not plan any dividend income from Gazprom in the 2025 budget," said Siluanov, the finance minister. Gazprom on Friday posted net income of $14.8 billion for 2024, recovering from a loss of almost $7 billion in 2023 and raising hopes of a resumption in dividend payouts. According to its own dividend policy approved in 2019, Gazprom should allocate 50% of its adjusted net profit for a dividend payout. It paid out 297.1 billion roubles in dividends on 2020 results, a record high, of which more than half was received by the state. Since the start of what Moscow calls its special military operation in Ukraine in February 2022, Gazprom has only once paid out an interim dividend - in autumn of that year, thanks to rising earnings from high gas prices in Europe at the time. Gazprom did not pay out on its 2021 results, ditching an annual dividend for the first time since 1998, because of high taxes and spending. After making a loss of almost $7 billion in 2023 - its first annual loss for about a quarter of a century on the back of a massive fall in gas exports to Europe - the company also left investors and the state empty-handed last year.
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)
