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. Last Updated: 07/27/2016

Budget on Pace to Beat Forecasts

Data showed on Wednesday that Russia's budget is performing better than expected so far this year, and analysts said they saw a small surplus by the end of 2001 rather than a balanced figure as officially planned.

The Finance Ministry said the federal budget in the January-July period showed a surplus of 1.8 percent of gross domestic product.

The ministry, quoting preliminary budget figures for the period, said primary surplus, which excludes debt servicing, was 4.8 percent of GDP.

Budget performance is seen as key for judging Russia's economic health as it faces high debt repayments in coming years and is trying to fund expensive structural reforms.

The ministry said in a statement that revenues in the first seven months were 845.1 billion rubles ($28.83 billion), or 70.8 percent of the planned amount for the year, while spending was 753.2 billion rubles, or 63.1 percent of the whole 2001 target.

Analysts said the better figures were due to high oil prices, high inflation and tax reform.

"The year-to-date surplus of 91.9 billion rubles is on track to beat our full-year target of 1.5 percent of GDP," said United Financial Group in its morning comment.

Alexei Moiseyev, senior analyst at Renaissance Capital, said his annual surplus forecast was 2.5 percent of GDP, thanks not only to high energy prices, but also to tax reform and higher-than-expected inflation.

The ministry also said that July's surplus was 4.4 percent of GDP, up from 0.6 percent of GDP in June. July revenues were 134.1 billion rubles, 6.7 percent above target.