For a finance minister who many thought would be a pushover after taking up his job last autumn, Anton Siluanov seems surprisingly determined to implement his own policy preferences. "We must develop financial-policy counter-measures against the risks of a fall in the oil price," he says, in an interview in his office near the Kremlin.
As Siluanov is only too aware, roughly half of Russia’s budget revenues come from oil exports. According to him, as little as a $1 drop in the price of a barrel of oil means that the annual budget loses between R55 billion and R60 billion [$1.9 billion]. That fact lies behind his efforts, he says, to reintroduce limits to government spending according to a budget rule.
Under the new rule, as Siluanov explains, government spending plans would be limited to the historical average oil price of the past 10 years, plus a maximum deficit of 1% of GDP. It would mean a big change of mindset.
Russia has about $500 billion in reserves, while public debt is around 10% of GDP. But since the financial crisis of 2008 the oil price at which Russia’s government revenues and spending break even has risen from $45 to $115 a barrel.
