Russia’s Economy Ministry proposes that the country’s budget over the next three years be based on an average crude price of $40 per barrel, Economy Minister Alexei Ulyukayev said on Saturday.
Ulyukayev said his ministry would be ready to submit its budget projections by Sept. 17-18. The finance ministry is due to submit its budget proposal for this year and for the next three years by November.
The $40-per-barrel of oil price is a price used in the base scenario for Russia’s economic development. Russia usually prepares several economic development scenarios but chooses only one for the budget.
“The base scenario is conservative,” Ulyukayev told journalists on the sidelines of a business forum in the Russian Far East port of Vladivostok. “How could it be more conservative?”
The Kremlin’s top economic adviser Andrei Belousov said on Saturday that using a $40 per barrel of oil base scenario for the budget was “rational”.
Ulyukayev also said that annual inflation in August may slow to 6.8 percent from 7.2 percent seen in July.
Separately, he said that sate companies may be required to pay higher dividends on 2016 results to aid the federal budget but decisions should be taken carefully in order not to harm firms’ investment capabilities.
An option to introduce interim dividends on Transneft was under consideration, Ulyukayev said.
Source: Reuters (Reporting by Denis Pinchuk; Writing by Lidia Kelly; Editing by Gareth Jones)