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Kudrin: Russia’s budget deficit to amount to 6% of GDP in 2016, if price of oil is $30

January 20, 20:20 UTC+3
Russia's former Finance Minister made this prediction on the sidelines of the World Economic Forum in Davos
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Alexey Kudrin

Alexey Kudrin

© Yuri Mashkov/TASS Archive

DAVOS, January 20 /TASS/. Russia’s budget deficit will amount to 6% of GDP in 2016, if the average price of oil is $30 per barrel, former Finance Minister Alexey Kudrin told TASS.

"With the price of oil at $30 per barrel the budget deficit will be 6% or more," Kudrin said on the sidelines of the World Economic Forum in Davos.

Russian authorities should give up hopes that oil prices will rise again and determine the long-term strategy of reforms in 2-3 months, Kudrin went on to say.

"Russia should understand one thing. We should give up hopes to high oil prices and do that unconditionally," the former minister said.

The level of $35-40 dollars a barrel can be taken as a target for budget calculations, Kudrin said. Windfall profit should be collected, if any, he added.

"The recent crisis shows everything may occur on the oil market. We need to understand oil prices may reach very low values, while social policy, defense potential and infrastructure should not be exposed," Kudrin said.

Oil prices may return to levels of $40-50 a barrel but it will take place in the long run, the ex-minister said. The government should determine the long-term strategy of reforms, he added.

"The nearest two-three months for Russia is time to work out an answer to all these challenges. Russia should decide not merely for this year but on its strategy as well," Kudrin said. Existing problems can not be resolved within a year, he added.

"The task of the government is to make the Russian economy sustainable at any all prices," Kudrin said.

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