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Russia to introduce new budget rules

Russia to introduce new budget rules

Russia has one of the largest petroleum industries in the world, the largest exporter of natural gas, and one of the largest oil producers. Amid the Russian-Ukraine conflict, the Russian economy is entering a recession, and facing many sanctions from world organizations. Country’s Finance Ministry has proposed a raise in the oil cut-off price, the idea is proposed to uphold the value of the ruble and to bring hard foreign currency in the country with its energy earnings. The Ministry also proposed a reduction in the production of oil, which was lastly calculated at 10.55 million barrels per day to now making it 9.5 million barrels a day.

What will happen, if the new budget is imposed?

  • The new oil cut-off price would be $60 per barrel, from the last fixed $40 per barrel.
  • A presumption has been made, that ruble might get 10-20 rubles weaker against dollars.
  • Russian GDP might face a decline by double digits.

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