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20 Mar, 2009 02:50

Russia may face years of budget deficit – Putin

Russia will most probably have to deal with a budget deficit for years to come, Prime Minister Vladimir Putin warned on Thursday.

In 2009, for the first time in eight years, Russia’s budget is expected to see a deficit of around 3 trillion roubles (about $89 billion), or 7.5% of economic output (GDP).

The Prime Minister stressed that it is necessary to pay close attention to increasing efficiency in budget spending.

“The deficit problem should be solved by civilized, internationally-recognised means – with the help of reserves,” he said.

Putin said the government will not resort to printing money to cover the deficit and will not cut the funding to key programmes.

He added instead of relying on ‘super-large oil revenue’, regular taxes from businesses and citizens will play a key role in filling the budget gap.

But the Prime Minister warned against attempts by tax and customs authorities to, in his words, “terrorise” businesses.