"Decreased non-interest expenditures and non-oil tax revenues cause special concern. They have dropped since 2000 as a result of weakened fiscal policy. Russia's fiscal policy has clearly weakened in the past three years," head of the IMF Moscow office David Owen said on Wednesday speaking at a round table discussion organized by the Russian Higher School of Economics. The round table is being held as part of the international scientific conference on the economy's competitiveness and modernization.
In the IMF's estimate, if oil prices were at the level of $20 per barrel today, Russia would run a considerable budget deficit amounting to over 1% of GDP.
The persistence of this trend in Russia's fiscal policy will give rise to risks linked with the weakened fiscal policy in the conditions of oil price decline, the expert says. "In this case, fiscal policy will have to be tightened. However, it is better to tighten it today to create a sort of a cushion for the economy in the event of oil price decline," David Owen believes.