Russia is preparing for a possible economic meltdown in the wake of the eurozone sovereign debt crisis and the slowing of global economic growth, and is drafting several crisis budget scenarios to cater for low oil prices, Deputy Finance Minister Alexei Lavrov said on Tuesday.
‘We are currently checking the resilience of the federal budget, and holding stress tests to see its exposure to sharp changes in external economic conditions. We are calculating revenues to estimate their levels at an oil price of $80 per barrel or even $60 per barrel,” he said.
Russia’s federal budget will fall short of 100 billion rubles ($3 billion) if the annual world oil price averages $100 per barrel in 2012, Deputy Finance Minister Tatiana Nesterenko said in early July.
Economic Development Minister Andrei Belousov had previously said the average oil price could equal $100 per barrel rather than the $115 per barrel forecast projected in the 2012 budget.
In early June, President Vladimir Putin signed amendments to the 2012 budget considerably increasing the projected oil price for this year to narrow the budget deficit, despite the continued fall in global oil prices.
The amendments were initiated in the spring of 2012 when the price of Russia’s Urals export crude blend hovered at a level of $115-120 per barrel, prompting the government to increase the projected average oil price for the year from $100 to $115 per barrel.
Oil prices have nosedived in the past few months, sinking below the $100 per barrel level but then currently recovering to slightly above $100 per barrel, amid increased investor concerns about the slowing of the world economy caused by the flaring eurozone debt crisis and worsening macroeconomic data from the United States and China.