Russia May Sell Minority Stakes In Major Companies To Reduce Budget Deficit

factory russia

Photo: oskarlin via Flickr

The Russian Finance Ministry announced sales of minority stakes in Russian companies, in an attempt to reduce the country’s budget deficit down to 4% of its GDP in 2011, from 5.9% in 2009.Minority stakes in major companies, such as oil producer Rosneft, pipeline monopol Transneft and the leading banks Sberbank and VTB, might be sold in the next years. The ministry said it expected earnings of up to 883.5 billion rubles (about $29 billion) in the next three years, starting with 298 billion rubles in 2011 ($9.8 billion), as the Russian newspaper Vedomosti reports. Eventually, the ministry expects the Russian budget deficit to decrease to merely 2% GDP in 2013, says the newspaper.

Of course, the Kremlin will keep juicing energy revenues with plans for a major tax increase.

The privatization plan still has to be approved by the Russian government. It could possibly be the biggest privatization wave since the one under Yeltsin, says German newspaper Frankfurter Allgemeine.

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