OREANDA-NEWS. January 30, 2009. Saint Petersburg has set the limit of borrowings for 2009 at RUB 10 bn vs. the earlier announced RUB 7.0 bn, but has not yet seen borrowing instruments, Vice Governor Mikhail Oseevsky said Thursday. The borrowings projected by the 2009 budget are increased by RUB 3.0 bn due to a reduction in projected budget revenue by RUB 109 bn (minus 29% of the approved budget) and a spike in the deficit to RUB 38.3 bn. RUB 28 bn of the deficit will be financed using the balance from the 2008 budget.

Authorities have voiced their intention to cautiously use borrowed resources and do not yet know how money can be raised amid the crisis. “If the situation improves, additional budget revenue will be used to replace borrowings and we will refrain from loans. I am almost confident that this figure will be either equal to zero or much lower than RUB 10 bn”, said Oseevsky. City Hall believes that loans will be needed in 2H 2009, at the earliest. The head of the financial committee of the local administration Eduard Batanov said that so far the St. Petersburg government mulls ruble-denominated bond issue, but does not see a market for their placement. “We will try a market issue and if we realize that there is no market, we will announce a tender among banks and raise a loan”, he said. “Given that the city has no debt, we have no doubts that there will be such offers (from banks concerning loans)”, said Oseevsky.