The Russian economy (catch all)

[Firn]

Two charts to keep in mind before going into the interview with the Russian Finance Minister:





So let us see the reaction of the Minister...

In short budget cuts are necessary to avoid a situation like back in '98 were the budget and balance sheet were not strong enough to stop the financial meltdown. According to DW some of cuts have already happened without much ado. Needless to say that any budget cut in this situation will have a negative impact on demand and the economy as a whole, especially in a country like Russia were the public sector and de-facto SCE make up much more of it compared to your typical Western country...

There is no doubt that the Minister hopes that ressources prices rally. Personally I guess that real prices will be higher in years to come, but every month this bear market lasts will inflict harm on the Russian budget and the Russian economy...