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Russia Plans Deep Budget Cuts as Revenues Drop

Rogue Valley

Rogue Valley

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Russia Plans Deep Budget Cuts as Revenues Drop

Jan. 14, 2015

MOSCOW—Russia 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 it—about $180 billion—is 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.
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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.
 
Simpleχity;1064197950 said:
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.
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On the other hand the EU seems to want to discontinue sanctions.
 
joG said:
On the other hand the EU seems to want to discontinue sanctions.
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I'm curious as to how far Russia's economy can tank, largely from outside influences, before Putin does something rash.
 
joG said:
On the other hand the EU seems to want to discontinue sanctions.
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Hollande does, but not Merkel. She understands what is at stake.
 
Simpleχity;1064197950 said:
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.
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If you have about an hour of your time to burn up, please watch what I watched last night on PBS's FRONTLINE, it's very informative, tell's everything about Putin's powers and his corruption. In the video, there are business owners who at a large meeting with Putin in which he was called out on his dirty dealings, and how those business owners ended up leaving Russia because Putin ran them out of the country, and took their businesses from them.

Putin is one ruthless dictator. He makes other Russian leaders look like meek kittens.

Putin’s Way | FRONTLINE | PBS

BTW, Putin is one of the richest people in the world, it is estimated that his net worth is in the neighborhood of 80 billion dollars.
 
Kobie said:
I'm curious as to how far Russia's economy can tank, largely from outside influences, before Putin does something rash.
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Or just gives up Crimea and starts cooperating with us. I for one hope the economy cripples Putin to the degree that Russia recognizes Dardania :mrgreen:
 
DDD said:
Or just gives up Crimea and starts cooperating with us. I for one hope the economy cripples Putin to the degree that Russia recognizes Dardania :mrgreen:
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Who ?
 
Kobie said:
I'm curious as to how far Russia's economy can tank, largely from outside influences, before Putin does something rash.
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Like invading Ukraine?
 
I'm just savoring all of this. The Putin cheerleaders in the American right were parading through the forum a few months ago claiming that Putin "owned" Obama. How Putin was a much stronger leader and Obama was just his bitch. It's mighty silent from that crowd these days.
 
DDD said:
Or just gives up Crimea and starts cooperating with us. I for one hope the economy cripples Putin to the degree that Russia recognizes Dardania :mrgreen:
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My guess is that the EU will consider Crimea a seperate issue from east Ukraine. As a result, most of the sanctions will end if Putin withdraws Russian military units from east Ukraine and stops stops sending mercenaries, volunteers and "volunteers". As for Crimea, all Russia may need to do is offer a fair referendum, which they will still win, though not at the claimed 99% rate of their last "referendum".
 
Kobie said:
I'm curious as to how far Russia's economy can tank, largely from outside influences, before Putin does something rash.
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He doesn't need much provocation.
It was doing fine and the jerk did something rash.
 
Simpleχity;1064198004 said:
Hollande does, but not Merkel. She understands what is at stake.
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She certainly is more reassuring that Chirac or Schröder were or Holland is. But she is as much a loose canon the first two and quite dangerous. Don't underestimate her.
 
Simpleχity;1064197950 said:
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.
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At least they know how to handle economic downturn...with at least some sound, proven ideas - raise interest rates to curtail inflation and cut spending.

The rest of the world (especially Japan, America and the EU) could learn this from Putin. Unfortunately, the macroeconomic morons who run their governments/central banks wouldn't know how to properly run an economy if their lives depended on it.

How do the morons in the west handle economic downturn?

They ramp up spending to try and 'stimulate' their way out of the mess and skew the inflation/unemployment numbers to make things look better then they are.
The inevitable result is an eventual collapse of the economy and a much worse problem then before the government started meddling.
 
joG said:
He doesn't need much provocation.
It was doing fine and the jerk did something rash.
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What goes around comes around. It could not happen to a more worthy "world leader" I hope he chokes on his oil.
 
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