Russia seeks spending cuts

MOSCOW: "New realities" including the possibility that oil prices will remain low for a prolonged period will force Russia to take hard decisions about government spending, its finance minister said on Wednesday.

Anton Siluanov warned the country´s budget would only balance at an oil price of $82 per barrel, well in excess of the $50 per barrel assumption used for this year´s calculations, let alone the $30 per barrel near which oil is currently trading.

Some forecasters have predicted crude, Russia´s major export and main source of revenues, could fall to $20 per barrel or lower.

Although he said oil prices could start to recover in the second half of the year, Siluanov told the annual Gaidar Forum in Moscow that the 2016 budget should be revised according to a lower assumed average oil price of $40 per barrel.

"Our task is to adapt our budget to the new realities," Siluanov said.

"Our budget will be balanced when the price is $82 per barrel so there are still a lot of decisions to be made when it comes to budget policy.

"Speaking at the same conference, Prime Minister Dmitry Medvedev also said the country needed to steel itself for tough times.