Russia’s Premier is notorious for his ability to cheer up irritated citizens and shift attention away from thorny issues. Dmitry Medvedev wished pensioners of Crimea to stay in good mood when he was talking about his government's inability to allocate funds to index pensions as compensation for high inflation.
Recently, the top official made a statement on TV that fiscal revenues from oil and gas exports had shrunk. However, the smart policymaker managed to look at the situation from the positive angle. Citing the Prime Minister, the brutal contraction of fiscal revenues means that the public budget has overcome dependence on energy exports. “Nowadays, the two thirds or nearly 66% of the federal budget revenues are provided by non-energy sectors,” the premier stated. Besides, he reminded that oil and gas sales generated 45% of fiscal revenues last year.
Russia obviously needs such a policymaker who always says the glass is half full. Russia has drawn up the budget based on an average Urals oil price, the main export blend, of $50 a barrel in 2016 as the global oil market has stabilized. The optimism came after oil prices rose more than 85% since hitting a 12-year low in February. This year, the budget deficit is expected to be 2.36 trln rubles, or 3% of GDP. Meanwhile, Russia’s public debt has contracted by $350 mln, which came as a pleasant surprise to the nationals. Nowadays, the foreign debt amounts to mere 10.5 trln rubles, which is one of the lowest in the world.
Finance Minister Anton Siluanov is another optimist in Russia’s cabinet of ministers. Recently, the official announced welcome news: the ruble has been unpegged from oil prices. However, it does not mean that the Russian currency is set to strengthen to 30 against the US dollar and 40 against the euro. The minister explained that now other factors affect forex rates of the Russian ruble. Meanwhile, the economy of the world’s biggest energy exporter is into the second year of recession.
