Russian finance minister releases budget caution
(MENAFN) Russia's Finance Minister Anton Siluanov has cautioned that the country may face significant budgetary challenges due to falling oil revenues and global economic uncertainties. In a recent meeting, Siluanov emphasized the need to increase fiscal reserves and revise the current budget rule, which directs oil revenues above $60 per barrel into the National Wealth Fund (NWF). This rule, meant to protect the economy from fluctuating oil prices, may need adjustments to ensure the fund can support three years of uninterrupted government spending.
Siluanov pointed out that the current global economic climate demands greater attention to the resilience of public finances against various potential global scenarios, including trade wars that are limiting export opportunities, including for Russia. He noted that government spending will need to be more cautious, with a stronger focus on maximizing the return from each budget ruble.
Although oil and gas revenues now make up just 25% of Russia's federal budget—reflecting reduced dependence on the sector—Siluanov highlighted a significant decline in revenues. In the first quarter of 2025, oil and gas revenues were down nearly 10% from the previous year, totaling 2.64 trillion rubles ($28.4 billion), based on preliminary estimates from the Finance Ministry.
Prime Minister Mikhail Mishustin also addressed the meeting, stressing the importance of maintaining macroeconomic stability and preparing for market volatility. Mishustin underlined the need for proactive measures to prevent budgetary risks and adapt to changing economic conditions.
The situation has been worsened by the recent decline in oil prices, which have fallen further since April due to US trade tariffs and OPEC+'s decision to increase production. On April 9, Russia's Urals crude dropped below $50 per barrel for the first time since June 2023. Earlier, the Finance Ministry had forecasted an average oil price of $60 per barrel for 2025, down from the original budgeted price of $70, with the Economic Development Ministry even projecting a lower $56 per barrel.
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