Russia’s Finance Ministry to return to surplus this year due to higher than expected oil prices.

Russian Finance Minister Anton Siluanov said on January 17, 2018, that the federal budget is on track to return to surplus this year due to higher than expected oil prices.

«This year, according to plan, we are to have a 1.3 % deficit to GDP, but if things continue as they are today, we will have a surplus,» Anton Siluanov said at an international economic forum in Moscow.

He added that the deficit of the federal budget for 2017 shrank to 1.5 % of gross domestic product (GDP) against the initially expected 2.2-2.5 %.

Siluanov said his ministry intends to keep the Russian ruble stable this year.

High oil prices have made the ruble stronger, but the finance ministry intended to continue purchasing foreign currency in order to smooth the rate.

According to the latest version of the budget rule, the cut-off price for the benchmark Russian Urals oil is set at $40 per barrel in 2017 prices and is subject to an annual indexation of 2 %, starting from 2018. The purchased currency then goes to the state reserve.

Russia last had a federal budget surplus in 2011, which accounted for up to 0.8 % of GDP on high oil prices.