Anton Siluanov, quoted by Russian news agencies, warned that budget cuts would be needed, calling for downsizing in the defense sector in which Vladimir Putin has decided to invest massively.
The new forecasts are based on a barrel of oil at 60 dollars and a dollar to 51 rubles, the minister said. The dollar was Friday around 2:54 p.m. rubles per barrel Brent, London, 60.37 dollars.
Mr. Silouanov confirmed, as already mentioned the press, the government had a 10% reduction spending. But “it will not be enough to balance the budget” , he warned. “We have proposals for new measures to be taken” .
MILITARY SPENDING criticized
Minister criticized the high level of military spending in the current budget (one third of expenditures). “I think it is necessary to allocate these expenditures to infrastructure, education, etc.” , he said, advancing the idea of downsizing in the security services.
To stop the fall of the ruble, the central bank has dramatically increased its interest rate (17% against 10.5%) and the increase in the cost of credit risk hitting full force households and businesses and stopping economic activity
Read also:. Five questions about the fall of the ruble
Officially, the government plans for the now down 0.8% of GDP next year, after growing by an estimated 0.6% this year. But the central bank has already warned that if oil prices remain at current levels, the contraction of the Russian economy exceed 4.5%
Read:. In a crisis, Vladimir Putin is optimistic for Russia
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