Russia sticking to fiscal discipline

RUSSIA / FSU POLITICS - In Brief 23 May 2020 by Alex Teddy
On May 21 Finance Minister Siluanov stated that he will not relax the fiscal rule. The rule states that oil revenues over USD 42 p b are put into the National Welfare Fund (NWF). When oil prices are below USD 42 p b the NWF makes up the shortfall in the budget. Many have urged the government to adapt this rule. The NWF has 11% of GDP in liquid savings. Some have called for the NWF to be spent on anti crisis policies. Most countries make exemptions to fiscal rules in such times. No parliamentary amendment on this has been tabled.There is a rumor that the fiscal rule might be suspended for the remainder of 2020. But do not count on it. The fiscal rule has kept the RUB safe from overdependence on oil. The government is going to borrow instead of abandon the rule. Anti crisis measures will remain limited. Russia's low debt is proving its worth.

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