Russian Finance Minister Alexey Kudrin said on Sunday that Russia's economy was strong enough to cushion the impact of a possible war in Iraq, seeking to ease worries that volatile world oil prices could batter the country's economy. Economists have expressed worries that a fall in the price for oil, the backbone of Russia's economy and monetary stability, could undermine growth that has boosted Russia's tax revenues and swollen Central Bank reserves to unprecedented levels. "War always puts pressure on the world economy, especially when the interests of various countries are involved," Kudrin told a Russian state television channel. "But the Russian economy is, I would say, prepared for this situation, including in the budget sphere."
Russia's 2003 budget is calculated on the basis of a $21.5 per barrel price of its main crude blend, Urals. "The reserves of the Central Bank will allow us to cushion any serious fluctuations and any pressure on the Russian economy," Kudrin added. "We have prepared scenarios and today can say we are not afraid of this war," the Russia Journal reported.