Russia will adjust 2015 spending if oil prices continue falling but the government will meet all its social obligations, President Vladimir Putin said at a press conference after a G20 summit November 16.
The 2014 average oil price will match the government forecast, Putin said. “Next year we will see … But if it (oil price fall) continues, we will adjust spending without touching our social obligations.”
Putin said that the floating ruble rate introduced by the central bank recently will cushion the negative effect of low oil prices for the budget. “The things that we used to sell for a dollar, and we received, say, 32 or 35 rubles, now we sell them for the same old dollars but we receive, what is today’s exchange rate? 45, 47 or 48 rubles. Budget revenue has even increased.”
The president admitted that a weaker ruble may undermine investment programs of energy companies on which the country’s economy rests.
Oil prices will, most probably, start correcting upwards next year, he said.
Putin said the government may support Rosneft which is hit by Western sanctions with the money of the National Wealth Fund but only after an appraisal of investment efficiency.