Russia will have to cut its budget deficit substantially if global oil prices fall below $90 per barrel, First Deputy Prime Minister Igor Shuvalov said on Tuesday.
"It's clear that if the oil price is below $90, we will have to do more serious fiscal consolidation," Shuvalov said in an interview with The Wall Street Journal.
"At $90 we feel more or less OK," he said.
Russia’s 2012 federal budget projects a budget deficit of 1.5 percent of GDP. Russia’s Economic Development Ministry lowered its budget deficit forecast to 0.5 percent of GDP in early April and upgraded its forecast of the average yearly price of the Urals export oil blend to $115 per barrel from the previous $110 per barrel.
Global oil prices have fallen from some $118 per barrel to below a critically important level of $100 per barrel in recent weeks amid investors’ worries about the lingering eurozone sovereign debt crisis and the slowing of the world economy.