Russia Plans Deep Budget Cuts as Revenues Drop
Just two weeks ago in a nationwide address, Putin said state spending would not be cut. Reality prevails. Economists expect inflation in Russia to reach 17% by spring. Russia's global credit rating will probably be reduced to junk status within a week. The junk rating will cost Russia another ~$30 billion dollars. Without a huge infusion of rubles, bank bankruptcies are expected to spiral within the coming months.Jan. 14, 2015
MOSCOWóRussia is planning steep cuts in spending across all parts of its budget, except defense, as it grapples with Western economic sanctions and a big oil-price drop while digging in for further confrontation with the West over Ukraine, officials said Wednesday. Moscow is counting on an eventual bounce in the price of oil. Its drop, officials said Wednesday, has been far more devastating to the Russian economy than Western sanctions. Russian Finance Minister Anton Siluanov said the budget faces a shortfall of up to $240 billion in revenue, but that most of itóabout $180 billionóis due to the oil-price collapse. He said his ministry plans 10% across-the-board budget cuts, although funding to the military would remain untouched.