Russia to run 7.5 pct budget deficit next year

MOSCOW — Russia will next year run a budget deficit equivalent to 7.5 percent of annual economic output, the highest deficit the country can afford, Prime Minister Vladimir Putin said Thursday.

Russia is facing its biggest economic test in a decade and is this year running a budget deficit of 9.4 percent of gross domestic product — its first deficit in a decade.

GDP dropped 10.1 percent in the first six months of the year, although some analysts believe Russia is now past the worst part of its recession.

Putin told a Cabinet meeting that the budget deficit next year would come to 3.2 trillion rubles ($101 billion).

“This is the highest deficit that we can afford that would not damage the macroeconomic stability,” Putin told the Cabinet. “We can’t afford to upset the macroecomoic stability.”

Russian officials have increased the deficit forecast several times this year.

Russia’s presidential aide Arkady Dvorkovich said back in April that the budget deficit for 2010 would not exceed 5 percent as anything higher would threaten Russia with an “excessive level of risk.”