Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Budget Surplus Shrinks

The federal budget surplus narrowed to 0.7 percent of targeted gross domestic product in the first 11 months of 2002, the Finance Ministry said Friday.

The ministry said in a statement that the surplus amounted to 70.6 billion rubles ($2.22 billion), quoting preliminary figures.

The budget surplus was 77.5 billion rubles, or 0.9 percent of the GDP, in the first 10 months of the year.

But Finance Minister Alexei Kudrin said the country's financial reserve -- money put aside to help service foreign debt repayments in 2003 -- is on course to reach its targeted level.

Debt repayments will reach a peak next year when some $17 billion is to be repaid.

At the beginning of October, the reserve, which is derived from the country's budget surplus, privatization revenues and balances on budget accounts, was 96.4 billion rubles. The target is 197.5 billion rubles, to be reached around year end. The remainder of the money will come from funds allocated in the 2003 budget.

"Given the fulfillment of the budget, proceeds from privatization and funds that will come in at the start of next year, the financial reserve will be in line with the planned volume," Kudrin was quoted by Interfax as saying.

Before the end of the year state coffers will get more than $775 million from last week's sale of 5.9 percent of LUKoil.

There will also be receipts from the privatization of 75 percent of Slavneft, the auction for which is set for Dec. 18. The stake's starting price is $1.7 billion.

Peter Westin, a senior economist at Aton brokerage said the figures suggested a substantial increase in government spending over the past two months, ahead of a nationwide parliamentary poll next year.

"The figures indicate a significant increase in spending in the last quarter of the year, probably because the government is under pressure to spend ahead of the election and to meet its financial reserve target," Westin said.

He noted, however, that the surplus could actually be higher if the Finance Ministry's definition of surplus contained money paid out to ministries but not yet spent.