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. Last Updated: 07/27/2016

Budget Runs Into the Red

The government ran up a 2 billion ruble budget deficit in the first two months of the year after more cash was allocated for salaries ahead of the March 14 presidential election, Itar-Tass reported Tuesday.

Russia's preliminary budget surplus was 55.5 billion rubles ($1.95 billion) at the end of January, or 5.3 percent of the country's gross domestic product that month.

"This [the budget shortfall] was planned as we managed to mobilize revenue and found it possible to give extra support to the regions to pay salaries," the agency quoted acting Finance Minister Alexei Kudrin as saying at a meeting with President Vladimir Putin.

"Budget revenue was collected as planned and we raised 435 billion rubles. Expenditure was 437 billion rubles, also as planned."

Budget revenue was 217.8 billion rubles, while expenditure was 162.4 billion rubles in January.

In televised remarks Kudrin also told Putin that the government transferred 16 billion rubles last month to a newly established stabilization fund, which stood at 122 billion rubles at the end of February.

"The stabilization fund is our insurance in case oil prices decline. It will allow us to meet all budget liabilities throughout the year," Kudrin said.

Russia's 2004 budget stipulates a surplus of 83.4 billion rubles, or 0.5 percent of GDP. Russia had a surplus of 900 million rubles, or 0.1 percent of the country's GDP at the end of February 2003.