MOSCOW - The Finance Ministry of the Russian Federation expects a drop in federal budget revenues in 2005 compared with this year, Finance Minister Alexey Kudrin said at a government meeting today.

He said a decline in revenues would be mainly due to lower average annual oil prices of $28 per barrel. According to Kudrin, budget revenues could decrease by 0.7 percent of the GDP as a result of falling oil prices. At the same time, he stressed that Russia had managed to recover after the 1998 crisis, when revenues halved in real terms.

In the estimation of the Finance Ministry, federal budget expenditures will rise by RUR 388bn in 2005 compared with this year.