Zee Beam News

June 5, 2009 (RIA Novosti) - ST. PETERSBURG, Russia's annual foreign borrowing will exceed $10 billion after next year, the finance minister said on Friday. Alexei Kudrin said the figure would be so high because "the reserve fund will no longer be there." He previously said Russia's foreign borrowing could total $7 billion in 2010 but that the country did not intend to seek loans from the International Monetary Fund. As of May 1, Russia's foreign debt was 1.28 trillion rubles ($41.5 billion), up 7.8% on the January 1 figure. Kurdin said earlier on Friday Russia's federal budget deficit could be as high as 9% of GDP in 2009. "The budget deficit could total from 7.4% to 9% of GDP in 2009," he told journalists on the sidelines of the St. Petersburg International Economic Forum. The Finance Ministry said on Monday Russia's Reserve Fund, set up to cushion the federal budget against a fall in oil prices, dropped 11.9% to 3.127 trillion rubles ($100 billion) in May. It earlier said a total of 1.6 trillion rubles will be spent from the Reserve Fund to cover the deficit in the first half of 2009 alone. Budget spending increased in the first quarter as the government allocated additional funds for anti-crisis measures, in particular to support the pension system, provincial administrations and key sectors of the economy, such as the defense and auto industry.