In the event oil prices drop to $12 per barrel, the lack of financial resources in Russia's expanded budget will reach 425bn rubles (about $13.52bn) in 2004, i.e. 2.9 percent of the GDP, Finance Minister Alexey Kudrin announced at an enlarged meeting of the ministry's board today. He stated that the 2003 budget was calculated on the oil price of $21.5 per barrel, and Russia's financial reserve was forecasted to reach about 20bn rubles (about $636m) by the end of this year.
The Finance Minister reiterated that it was important to use the current favorable external economic situation and create mechanisms that would secure budget's implementation irrespective of changes in the global economic situation. Kudrin urged the establishment of a stabilization fund with a basic volume of 8.7 percent of the GDP (1.1 trillion rubles, or $35bn) that could be accumulated over about four years of favorable external economic conditions.