Russia May Burn Wealth Funds in 3 Years Without Cuts - Bloomberg

Russia May Burn Wealth Funds in 3 Years Without Cuts - Bloomberg:



"Russia, poised to enter a recession, will burn through its rainy-day funds in three years if the government doesn’t change the budget structure, according to Finance Minister Anton Siluanov.



With oil prices at $60 a barrel, Russia’s economy may contract about 4 percent next year and have a budget deficit of more than 3 percent of output, Siluanov told reporters in Moscow today. The ministry will use these estimates and an exchange rate of 51 rubles per dollar to review the 2015 budget.



Russia is facing its first recession since 2009, and the contraction may last for two years, according to economists in a Bloomberg survey. Oil, its biggest export earner, is trading near a five-year low, compounding the effect of sanctions imposed by the U.S. and its allies over President Vladimir Putin’s annexation of Crimea in March. The deterioration puts Russia at risk of a downgrade to below investment grade, Standard & Poor’s said this week."



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