Russia will have a deficit-free budget in the next 12 years if the transfer of oil and gas is maintained at 3.7% of the country's GDP. Despite the budget's strong dependence on petrodollars, VAT (value-added tax) will provide the bulk of the budget revenues.
The investment boom in Russia will continue for the next 12 years. Investments will grow from 6.2 trillion rubles ($253.1 billion) in 2007 to 50.2 trillion rubles in 2020.
State investments in the economy (primarily, in infrastructure) will increase by about five times, and private investments will increase by nine times. The private sector's investments will double as a proportion of the GDP, while state investments will stay at about the 2007 level.
According to the Russian Ministry of Economic Development and Trade, the inflow of petrodollars will run dry by 2017. The reserve fund will no longer be replenished, therefore it will be used up. By 2020, it will account for 4.1% of the GDP (its size is fixed at 10% of the GDP in the present Budget Code).
By 2020, oil output will remain at the 2007 level under the worst-case scenario; it will grow from the present 490 million metric tons to 540 million metric tons under the most optimistic one. Only gas production will grow under both scenarios, but only by 30%. The ministry forecasts a slight drop in oil prices in 2009-2011, to $56 per barrel. This will reduce Russia's trade surplus to zero and lead to the devaluation of the ruble. Then oil prices are expected to go up again. The average oil price this year is projected to be $62 per barrel. It is expected to fall next year and rise again to the 2007 level by 2017; in 2030, a barrel of oil (Urals brand) will cost $75.
There will be a considerable increase in social spending. As a result, the Pension Fund's budget deficit will reach 50% by 2020, with the gap to be covered by federal budget funds.
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