WASHINGTON (Reuters) - Russian economic growth is running at or ahead of its potential and there is a risk of overheating from a planned increase in the 2012 non-oil budget deficit, an International Monetary Fund spokesman said on Thursday.
“The budgeted increase in the non-oil deficit of 2012 poses a risk of overheating,” IMF spokesman Gerry Rice told a briefing for reporters. “We believe the government should take advantage of high oil prices by reducing its non-oil deficit and saving windfall oil revenues in the reserve fund.”
The IMF has urged the Russian authorities to cut the non-oil budget deficit this year by curtailing subsidies and tax exemptions, and aim to reduce the deficit by 2015 to 4.7 percent of gross domestic product.
Russia’s non-oil deficit is estimated at between 10 and 11 percent of GDP this year.
Reporting by Lesley Wroughton; Editing by James Dalgleish