Reserves Will Enable Russia to Overcome Possible Crisis — Kudrin
Interfax - 5.27.12 - JRL 2012-97

KAZAN. May 27 (Interfax) - Russia has sufficient reserves to meet its current obligations during a possible crisis period, said ex-finance minister Alexei Kudrin, who chairs the Civil Initiatives Committee.

file photoThe Russian economy will feel a negative impact if the price of oil barrel will drop below $80, he said at a public lecture for students in Kazan on Saturday.

"Economic growth will be close to zero, this is stagnation. Anti-crisis programs will have to be put in place again," Kudrin said.

The scale of a crisis is not clear yet, it could be worse or not as bad as 2008, he said.

"We cannot increase the spending, the level of which we won't be able to contain during a crisis period. With more than half of its revenues depending on the oil price, the Russian budget is balancing at the $80 level," Kudrin said.

During the 2008 crisis, social spending was not reduced; moreover, spending to boost economic demand, on cars, for example, was increased, he said.

Before the crisis, the reserve fund was formed at 16% of Gross Domestic Product, Kudrin said. "Eight percent of GDP were spent on anti-crisis measures. Today the total reserve is around 8% of GDP. If there is a similar crisis, we have sufficient reserves to cope with the circumstances that are there," Kudrin said.

Keywords: Russia, Economy, Business - Russian News - Russia

KAZAN. May 27 (Interfax) - Russia has sufficient reserves to meet its current obligations during a possible crisis period, said ex-finance minister Alexei Kudrin, who chairs the Civil Initiatives Committee.

file photoThe Russian economy will feel a negative impact if the price of oil barrel will drop below $80, he said at a public lecture for students in Kazan on Saturday.

"Economic growth will be close to zero, this is stagnation. Anti-crisis programs will have to be put in place again," Kudrin said.

The scale of a crisis is not clear yet, it could be worse or not as bad as 2008, he said.

"We cannot increase the spending, the level of which we won't be able to contain during a crisis period. With more than half of its revenues depending on the oil price, the Russian budget is balancing at the $80 level," Kudrin said.

During the 2008 crisis, social spending was not reduced; moreover, spending to boost economic demand, on cars, for example, was increased, he said.

Before the crisis, the reserve fund was formed at 16% of Gross Domestic Product, Kudrin said. "Eight percent of GDP were spent on anti-crisis measures. Today the total reserve is around 8% of GDP. If there is a similar crisis, we have sufficient reserves to cope with the circumstances that are there," Kudrin said.