Russian Budget Is Beyond ‘Deficit’

The gap between revenue and spending in Russia’s 1999 budget will be too monstrous to even be called a “deficit,” and the government has no idea where to find money to plug the hole, a senior finance ministry official said Friday.

Russia, facing its worst economic crisis since the Soviet collapse, is seeking relief from creditors as it faces the inability to repay all its foreign debts next year, another official said.

The government was putting together three versions of a budget draft Friday evening, ahead of a session today that would finalize the draft.

The versions put the disparity between revenue and spending at $9 billion, $16 billion and $21 billion, said a senior government official, who spoke on the condition of anonymity. The first two versions project an influx of aid from international lenders, while the third has none at all.

Alexander Pochinok, who heads the government department in charge of economic analysis and forecasting, said Russia had no sources to plug the gap, which is beyond a simple “deficit.”

“This difference can’t be called a budget deficit, because according to economic theory, a deficit has known sources that are used to cover it with,” Pochinok told reporters.

“But we don’t have sources to finance this hole, and therefore we can’t call it a deficit.”

Meanwhile, First Deputy Prime Minister Yuri Maslyukov said Russia will ask the International Monetary Fund for new terms on the $4.6 billion due the lending organization next year.

Russia will be able to repay less than $10 billion out of $17 billion of foreign debt due next year, Deputy Finance Minister Mikhail Kasyanov told Reuters Television.

Maslyukov held talks on Friday evening with a visiting mission of the IMF.

New IMF loans have been on hold since August until Russia comes up with a comprehensive plan to combat the crisis.