Russian PM calls for spending cuts

Russian Prime Minister Dmitry Medvedev has ordered the government to decide which spending could be significantly cut, saying on Friday that a dramatic fall in oil prices was creating serious risks for the budget.

This year’s budget assumes an average oil price of $50 per barrel and a budget deficit of 3 per cent of gross domestic product (GDP). Russian finance minister Anton Siluanov has already called for the oil price assumption to be revised to $40 per barrel.

“The figures in the budget now already seem excessive, Mr Medvedev told a government meeting.

“The dramatic move in the oil prices which we see over recent weeks creates highly serious risks for budget fulfilment.”“We need to adjust the expenditure part of the budget, bringing it in line with expected incomes.”

He did not rule out a further fall in oil prices, in particular due to the expected lifting of sanctions against Iran.