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Russia May Lose Investment Rating with $80 Oil – Kudrin

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Russia May Lose Investment Rating with $80 Oil - Sputnik International
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Russia may lose its investment-grade rating if world oil prices plunge to $80 per barrel and the Russian government continues massive social and defense spending, ex-finance minister Alexei Kudrin said on Wednesday.

MOSCOW, December 5 (RIA Novosti) – Russia may lose its investment-grade rating if world oil prices plunge to $80 per barrel and the Russian government continues massive social and defense spending, ex-finance minister Alexei Kudrin said on Wednesday.

“If the [oil] price is $80 per barrel, the budget deficit will widen to 3 percent of GDP," Kudrin said.

"The figure of 3 percent is a critical boundary, beyond which we are likely to lose our country’s investment-grade rating,” he said.

Russia’s budget for 2013-2015 will run a deficit even with oil priced at $100 per barrel, he said.

Russian President Vladimir Putin on Wednesday signed the federal budget for 2013 and the 2014-2015 planning period.

Russia’s 2013 budget sets revenues of 12.8 trillion rubles ($414 billion) and expenditures of 13.3 trillion rubles ($430 billion), with a budget deficit of 521.4 billion rubles ($16 billion).

The largest part of Russia’s budget funds in 2013 will be used to finance the government’s social bill, which will amount to almost 4 trillion rubles. The pension system will claim over 2.8 trillion rubles of this amount.

Russia’s defense spending will rise by 25.8 percent next year compared with 2012.

 

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