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. Last Updated: 07/27/2016

Budget Deficit on Target, Expected to Fall in 1995

Russia's budget deficit is on target at under 10 percent of gross domestic product this year, and will fall to around 8.5 percent in 1995, a senior Finance Ministry official said Friday.

"The budget is being executed in conformity with the law," said Deputy Finance Minister Sergei Aleksa-shenko. "We are collecting our revenues and financing our expenditures, keeping within the stipulated deficit limits."

Both revenues and expenditures for 1994, however, will be considerably less than those planned in the budget, Aleksashenko told reporters.

"The figures stipulated by the law on the budget ... are the upper limit we will never reach," he said.

Budget income is forecast to amount to just 51 to 52 percent of the 124.5 trillion rubles ($50.6 billion) stipulated in the budget by the year's end, with expenditure coming in at 64 to 66 percent of the 194.5 trillion rubles Russia had planned to spend.

In a statement, the Finance Ministry blamed low inflation, a 20 percent decline in output and poor performance by tax collection authorities for the shortfall in revenues.

Inflation has declined from 22 percent in January to 4 percent in August. The Finance Ministry said this was 1.8 times lower than had been assumed when the budget was drawn up. Aleksashenko predicted a rise in the rate of inflation to 6 to 7 percent for September.

Aleksashenko's estimate of an 8.5 percent deficit in 1995 is in line with figures released this week by the Finance Ministry of between 7.9 and 11.1 percent of GDP. The projected deficit is considerably higher, however, than in a previous draft 1995 budget that had foreseen a 5 percent deficit and monthly inflation of 3 percent.

Aleksashenko said the complete 1995 draft budget had not yet been released because of computer-related and other problems in the Finance Ministry. The budget is due to be presented to the State Duma in October.