Russia to Deplete Only Half of Reserve Fund If Oil Costs $40 in 2016
Only half of the Russian Reserve Fund will be depleted by the end of 2016 if the government cuts federal budget spending and oil prices stand at $40 per barrel, Sberbank's CEO Herman Gref said Tuesday.
MOSCOW, February 16 (Sputnik) – On Monday, experts from the Gaidar Institute for Economic Policy, All-Russian Academy of Foreign Trade and Russian Presidential Academy of National Economy and Public Administration issued a statement saying that the Reserve Fund would be spent by end of 2016 if the oil prices stayed at relatively low levels and government did not address economic difficulties.
'It is very difficult to predict the use of the government's Reserve Fund. According to our estimates, if the planned budget cuts are implemented and the oil price stays at $40 per barrel, then approximately half of the Reserve Fund will be spent,' Gref told reporters.
Global oil prices have sharply declined over the past year, with both the WTI and Brent benchmark dropping below $30 a barrel. Meanwhile, the Russian budget is balanced with oil price standing at $50 a barrel. The government plans to make up the budget deficit by dipping into the Reserve Fund.
According to the Russian Ministry of Finance, the Reserve Fund is estimated at $49,72 billion, or about 4.8 percent of the country's GDP.
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