Economic security
The Russian Ministry of Finance is struggling to balance the budget, gutted by the low prices of oil and other Russian staple export commodities. The problem is made worse by Western financial sanctions over Crimea and Ukraine, which have severely limited Moscow’s ability to borrow abroad, while the internal money market is shallow (see EDM, March 3). Social spending is being axed: State-funded salaries and pensions are not being inflation-adjusted while spending on health care and education has been cut. Additional levies are being introduced. The finance ministry announced a goal of a 10 percent overall sequestration of federal government expenditures in 2016 as a first step to balance the budget but has warned this might not be enough, if the price of oil does not rally soon.
The Russian Ministry of Finance is struggling to balance the budget, gutted by the low prices of oil and other Russian staple export commodities. The problem is made worse by Western financial sanctions over Crimea and Ukraine, which have severely limited Moscow’s ability to borrow abroad, while the internal money market is shallow (see EDM, March 3). Social spending is being axed: State-funded salaries and pensions are not being inflation-adjusted while spending on health care and education has been cut. Additional levies are being introduced. The finance ministry announced a goal of a 10 percent overall sequestration of federal government expenditures in 2016 as a first step to balance the budget but has warned this might not be enough, if the price of oil does not rally soon.
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