PRESS: Russian ministry suggests cutting budget 5% in 2016

MOSCOW, Dec 11 (PRIME) -- Russia’s Finance Ministry has suggested a 5% budget sequester in 2016 to minimize risks of shortfalls in revenue due to low oil prices, business daily Vedomosti reported Friday referring to the ministry’s report on budget risks.

The ministry’s measures also include a rise of privatization incomes to 1 trillion rubles, a cut of subsidies and appropriations, a freeze of new capital investments in facilities whose construction is to be launched in 2016 and also spending the anti-crisis 557 billion rubles only in an emergency case, three federal officials told Vedomosti.

The ministry has also calculated an option of optimizing budget spending including a 1.9 trillion ruble closed part of spending -- in this case the volume of spending that cannot be cut falls to 55%, or nine trillion rubles from 70%, or 11.3 trillion rubles.

A ministry representative told the business daily that the oil price may not fall below U.S. $40 per barrel, but the ministry still has to keep the risk in mind.

The ministry’s goal is to prevent the government from spending anti-crisis reserves, a government official told Vedomosti. “Obligations exceed revenue that the economy generates significantly, so the Finance Ministry calls for cautious spending of reserves,” the official said.

(69.2151 rubles – U.S. $1)

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