RIA Novosti reported that Russia may lose its investment grade rating if world oil prices plunge to USD 80 per barrel and the Russian government continues massive social and defense spending.
Mr Alexei Kudrin ex finance minister of Rusia said that “If the oil price is USD 80 per barrel the budget deficit will widen to 3% of GDP. The figure of 3 percent is a critical boundary beyond which we are likely to lose our country’s investment grade rating. Russia’s budget for 2013 to 2015 will run a deficit even with oil priced at USD 100 per barrel.”
Mr Vladimir Putin president of Russia signed the federal budget for 2013 and the 2014 to 2015 planning period. Russia’s 2013 budget sets revenues of RUB 12.8 trillion and expenditures of RUB 13.3 trillion with a budget deficit of RUB 521.4 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 RUB 4 trillion. The pension system will claim over RUB 2.8 trillion of this amount. Russia’s defense spending will rise by 25.8% next year compared with 2012.
