MOSCOW, March 23 (Reuters) - Russian President Vladimir Putin told the government on Monday to make "balanced decisions" on how to use newly boosted state revenues from energy exports amid a spike in
Putin Calls for Balanced Use of Russia’s Energy Revenues Amid Global Price Spike
Russia’s Economic Strategy in Response to Energy Revenue Surge
Putin’s Call for Balanced Decisions
MOSCOW, March 23 (Reuters) - Russian President Vladimir Putin told the government on Monday to make "balanced decisions" on how to use newly boosted state revenues from energy exports amid a spike in global prices.
Shielding the Economy from External Risks
He also stressed the need to shield the economy and public accounts from external risks and asked Russia's oil companies to use the additional revenues to pay back their massive debts to banks.
Background: Russia’s Fiscal Challenges
Impact of Sanctions and Currency Strength
Before this month's sharp rise in oil and other energy prices due to the war in the Middle East, Russia was dealing with falling budget revenues caused by a larger discount on its oil due to Western sanctions and by a strong rouble.
Government’s Austerity Measures
The government has prepared a package of austerity measures that includes cuts to non-essential spending and measures to prevent the fiscal reserve fund from being depleted.
Changing Fortunes Amid Global Events
Effect of Middle East Conflict on Revenues
However, the change in fortunes as a result of the U.S.-Israeli attacks on Iran means Russia now has to consider what to do with the additional revenues.
Putin’s Statement on Fiscal Policy
"Regarding the federal budget, it is also necessary to make balanced decisions concerning cyclical revenues to, I repeat, ensure the long-term balance of the country's main financial document," Putin told a meeting with officials.
"For effective macroeconomic policy, it is important to consider all significant factors and to proactively respond to external risks, which are currently manifesting sharply in global markets and within the system of international economic relations," he said.
Reporting Credits
(Reporting by Dmitry Antonov and Vladimir Soldatkin; Writing by Gleb Bryanski, edititng by Andrei Khalip)
