Russia’s Economy Faces Tough Times, Finance Minister Siluanov Admits

The situation in the Russian economy is currently not developing in the best way, with a significant deviation from macroeconomic forecasts for 2020, Finance Minister Anton Siluanov said at a meeting of the board of the Federal Treasury, according to RNS.

“Unfortunately, the situation is not developing in the best way at the moment, and we deviate from the macroeconomic forecasts that we made for the current year. Of course, this will affect the budget,” Siluanov said.

“Now a much more serious factor was added – the coronavirus factor. The problem is not even the virus itself, but the fact is that entire sectors of the economy are shrinking. We have already talked about sectors such as transportation, including air transportation, tourism, small business, this is followed by a number of other areas. We see that the volume of purchases of expensive consumer goods, including cars, is declining,” the minister added.

Siluanov also said that Russia’s budget in 2020 will be in deficit. “Of course, this year we will transfer to a deficit budget. We will have to use the resources of our reserve, the National Wealth Fund, this is the reason it was formed,” he said.

The minister emphasized the impact of lower oil prices on the situation in the economy. “Only the oil factor at current prices reduces the volume of oil and gas revenues by almost 3 trillion rubles compared to the planned figures,” Siluanov said.

According to him, at the moment it is necessary to support sectors of the economy that cannot exist without state support. “We now need to concentrate resources on targeted, effective support for those sectors of the economy, regions, small businesses, all those areas that simply cannot exist without state support,” the finance minister said.