The finance ministry forecasts a budget deficit of at least seven trillion rubels ($750 million at the current exchange rate) this year, Deputy Minister Maksim Yermalovich said in an article published by the ministry's journal earlier this month.
He blamed the unexpected budget deficit on a revenue shortfall and higher-than-expected expenditures.
According to the article, this year's budget spending is to be by eight trillion rubels more than originally planned, not least because of higher-than-expected expenditures on subsidizing loans.
The government took efforts to limit spending and raise extra revenues but still failed to avert a budget deficit, Mr. Yermalovich explained.
The deputy minister said that the government would have to dip into its reserves to finance the deficit. Its earlier efforts to avoid a budget deficit through a crackdown on the shadow economy and smuggling of goods, and through lower loan interest rates proved not efficient enough, he acknowledged.
Mr. Yermalovich noted uncertainty over the possibility of borrowing more money inside the country and abroad. "The opportunities to cut the deficit through the further reduction of budget spending are also limited," he said.
