Russia sets aside $340 bln for anti-crisis package

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Russia's government has earmarked 10 trillion rubles ($340 billion) for an anti-crisis package which is comparable to the country's annual budget, the government's press office said on Monday.
MOSCOW, December 29 (RIA Novosti) - Russia's government has earmarked 10 trillion rubles ($340 billion) for an anti-crisis package which is comparable to the country's annual budget, the government's press office said on Monday.

"In total, 10 trillion rubles have been set aside for anti-crisis measures. This money will come from the federal budget, the Central Bank and reserve funds," the press office said.

This is almost double the amount of Russia's overall reserves. As of December 1, Russia's Reserve Fund was 3.6 trillion rubles ($123 billion) and National Wealth Fund, 2.1 trillion rubles ($72 billion).

The government is also ready to provide 92 billion rubles ($3 billion) from the federal budget in financial assistance to the so-called core enterprises, as well as up to 200 billion rubles (about $7 billion) worth in state guarantees.

The government issued on Thursday a list containing the names of 295 companies that will receive state support, including companies working in transport, energy, oil and gas, communications, media and other sectors.

Russian Finance Minister Alexei Kudrin said on Saturday the country would have a budget deficit of 1.5 trillion to 2.5 trillion rubles ($52 billion to $87 billion), which is almost 6% of GDP.

But he said spending would not be cut even if oil prices plunged below $20.

In the 2009 budget approved by parliament, revenue exceeded expenditure by 1.9 billion rubles, but the document assumed an average oil price of $95 a barrel.

"Even if oil plummets to $20 per barrel, we will not slash spending, at least not at the federal level," he said, adding that the government would restructure its spending projections but there would be no reductions.

"Public sector employees, pensioners have nothing to fear," he said.

However, an Economic Development Ministry official earlier said that budget expenditure could be cut by 8%, but that the figures did not include the anti-crisis measures adopted by the government. Yelena Lebedinskaya of the Economic Expert Group said anti-crisis expenditure could push the total deficit to 9.5 trillion rubles.

She said the deficit would have to be made up with borrowing - limited by the budget code to 1% of GDP - and tapping the Reserve Fund.

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