Russia plans to increase borrowings from reserve fund

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The Russian government would ask for permission to increase borrowings from the reserve fund in 2015, Finance Minister Anton Siluanov said Wednesday.

“We will submit the request to the State Duma (lower house of parliament) to use our safety cushion. The law permits up to 500 billion rubles (over $8.5 billion), but we have to raise this limit for several times if necessary,” Siluanov told Russia’s TV channel Rossiya 24.

The ministry plans to ask the legislators to amend the budget plan and include the borrowings from the reserve fund, Siluanov said.

Meanwhile, Siluanov said that budget revenue has been estimated to fall to 2.6 trillion rubles (over $44 billion) in 2015, and the government has already revised the federal budget to cut spending at about 10 percent.

Siluanov added that more spending should be allocated for projects of import substitution, export support, infrastructure and so on.

“We’ll have to further limit spending, because the economy is not likely to bring so much revenue,” Interfax news agency quoted the minister as saying.

If the current revenue situation persists in 2016-2017, the government will have to further change the budget structure, according to Siluanov.

“Obligations previously assumed in the budget have to be revised. This is the only path to avoid problems like inflationary financing. Spending should go with the actual revenue that accumulated with economic development,” Siluanov said.

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