"The period of spending increases is ending," Kudrin told lawmakers. "In the coming years, we will have at least to keep spending at the current level for many sectors, but for some we won't even be able to do this, and programs will have to be reduced."
Russia's two sovereign wealth funds fell in March to a combined 7 trillion rubles ($206.1 billion) as the government began transferring money to cover its first budget deficit in a decade. The government expects revenue to drop by 30 percent this year as the economy enters its first recession in 10 years and tax revenue tumbles on slowing demand at home and abroad.
The Reserve Fund fell to 4.1 trillion rubles at the start of the month, and the National Welfare Fund stood at 2.9 trillion rubles, according to the Finance Ministry. The government is forecasting a 2.2 percent economic contraction this year after a decade of expansion.
The revised budget could be changed to seek new funds to recapitalize banks should the level of bad loans in the banking sector exceed 10 percent, Kudrin said.
Overdue loans in the sector currently stand at 7.5 percent, Kudrin said in an interview with Vedomosti published Wednesday.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.