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Russian Minfin to Prepare Forecast Budget Based on $60/barrel of Oil in Aug
Interfax - 7.4.12 - JRL 2012-121

MOSCOW. July 4. (Interfax) - The Russian Finance Ministry will calculate its forecast federal budget based on an oil price of $60 per barrel in August, Director of the Finance Ministry's Budget Department Alexei Lavrov told journalists on Wednesday.

Cash, Coins, Line Graph
Earlier on Wednesday at a State Duma budget committee meeting, Deputy Finance Minister Tatyana Nesterenko said several factors observed in the global economy "are forcing the government to assess the risks of a deteriorating economic situation." In connection with this, instructions were given to develop "a forecast budget calculated on an oil price of $60 per barrel on the basis of risk testing."

"This is rather a forecast of a behavioral model in the case of a sharp drop in oil prices, which could be unlikely. However, from the point of view of risk assessment, this issue has to be calculated," Nesterenko said.

Oil Well file photo
Lavrov, who presented at the committee meeting and explained the amendments to the Budget Code that enshrine a new budget rule, said that the implementation of this rule will require a slight cut in budget spending. "Social obligations are not at all affected by this law. Everything that is envisaged will be indexed, and the validity period of the obligations will be stretched out to fit into the constraints of 2013-2014," he said.

Meanwhile, a number of other spending items will have to be restructured - for example, spending on the pension system, which the Finance Ministry forecasts will decline if pension reform is carried out.

"There is also the state armament program, economic subsidies and state contracts," Lavrov said, noting that with regards to the armament program, a portion of spending would simply be moved from one year to another.

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

 

MOSCOW. July 4. (Interfax) - The Russian Finance Ministry will calculate its forecast federal budget based on an oil price of $60 per barrel in August, Director of the Finance Ministry's Budget Department Alexei Lavrov told journalists on Wednesday.

Cash, Coins, Line Graph
Earlier on Wednesday at a State Duma budget committee meeting, Deputy Finance Minister Tatyana Nesterenko said several factors observed in the global economy "are forcing the government to assess the risks of a deteriorating economic situation." In connection with this, instructions were given to develop "a forecast budget calculated on an oil price of $60 per barrel on the basis of risk testing."

"This is rather a forecast of a behavioral model in the case of a sharp drop in oil prices, which could be unlikely. However, from the point of view of risk assessment, this issue has to be calculated," Nesterenko said.

Oil Well file photo
Lavrov, who presented at the committee meeting and explained the amendments to the Budget Code that enshrine a new budget rule, said that the implementation of this rule will require a slight cut in budget spending. "Social obligations are not at all affected by this law. Everything that is envisaged will be indexed, and the validity period of the obligations will be stretched out to fit into the constraints of 2013-2014," he said.

Meanwhile, a number of other spending items will have to be restructured - for example, spending on the pension system, which the Finance Ministry forecasts will decline if pension reform is carried out.

"There is also the state armament program, economic subsidies and state contracts," Lavrov said, noting that with regards to the armament program, a portion of spending would simply be moved from one year to another.


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