MOSCOW, May 25 (RIA Novosti) - Russia's foreign borrowing could total over $7 billion in 2010, Finance Minister Alexei Kudrin said on Monday.
"Russia has good prospects for market borrowing, something we'll do at a suitable time, taking into account the market situation. We are proposing to return to foreign loans next year," Kudrin said.
In the event of a favorable market situation, Russia could eventually raise the amount of its borrowing to more than $10 billion, the finance minister said, adding that the Russian authorities did not intend to seek loans from the International Monetary Fund.
Russia's budget deficit could prove to be larger than the planned 7.4% in 2009, Kudrin also said.
"Budget spending will decrease next year in relation to 2009. This is understandable, as this year we have spent an unprecedented amount of money on anti-crisis measures and on the financing of the 7.4% budget deficit."
He also commented that taking into account the new challenges presented by GDP contraction, the deficit could even be larger.
According to Kudrin, Russia will have to work hard to reduce the budget deficit to 5% of GDP in 2010 and to 3% of GDP in 2011. He said this would require budget spending restructuring, the reformation of budget-financed institutions and measures to make spending more efficient.
"The issue has been raised of reviewing some programs, postponing some projects, and concentrating resources in top priority areas linked with social development, national projects and infrastructure, but along with a general reduction in expenditures," Kudrin said.
He also said that inflation in Russia was expected at 13% in 2009 and 10% or less in 2010.
Consumer prices in Russia rose 6.6% from January 1 to May 18 as compared with 7.2% in the same period last year. Consumer price growth in Russia started to slow down in April with prices growing by only 0.7%, compared with 1.3% in March. Last year, consumer prices rose 13.3%.
Russia's Central Bank cut from May 14 its key lending rate by 0.5 percentage points to 12% per annum, following a slowdown in consumer price growth.
