The Russian economy is ready to face a new wave of crisis and the government is considering a variety of scenarios, including a strong drop in oil prices, said Vladimir Putin in an interview with TASS.
“Yes, we are prepared. We think about all the scenarios, including the so-called catastrophic decline in energy prices, which is quite possible, we don’t rule it out. And the Ministry of Economy, Ministry of Finance and the government in general plan for economic development in each of these scenarios.”
Putin noted that during crises, global economic imbalances are only amplified, but first and foremost, it has a negative impact on developing economies.
However, Russia is in a slightly more advantageous position than other countries, which do not have such reserves, as Russia, said Putin.
“We took very good care of our reserves – the gold and currency reserves, and the reserves of the government. They are quite large, and this allows us to be confident in the fact that we will completely fulfill all undertaken obligations and will hold all budgetary processes under control, as well as the entire economy,” – he said.
As of November 1, 2014, the reserve fund had $90 billion or close to 4 trillion roubles, which is 5% of Russian GDP.
According to Russian Ministry of Finance:
“The Reserve Fund is part of the federal budget. The Fund is intended to provide the state’s fulfillment of its spending obligations in the event of declining oil and gas revenues of the federal budget. Reserve Fund contributes to sustainable economic development, reducing inflationary pressures and reducing the dependence of the national economy on fluctuations in earnings from exports of non-renewable natural resources.
Reserve Fund actually replaced the Stabilization Fund of the Russian Federation. In contrast to the Stabilization Fund of the Russian Federation in addition to federal budget revenues from the extraction and export of oil, the Reserve Fund includes federal budget revenues from oil and gas exports. The maximum size of the Reserve Fund has been fixed at 10 % of forecasted for the financial year gross domestic product of Russian Federation.”