TheRealTalker
Banned
https://twitter.com/BBCSteveR/status/774245316988137472Russia's deputy finance minister says Russia's Reserve Fund to be exhausted in 2017. It stood at 142billion in Sept 2008.
http://www.bloomberg.com/news/artic...-has-this-year-s-biggest-drop-as-buffers-wiltOne of Russias two sovereign wealth funds had its biggest drop of the year in August, underlining the urgency of bringing the deficit under control as the budget gap remains on track for the widest since 2010.
The Reserve Fund, which peaked at $142.6 billion in 2008, fell to $32.2 billion last month, a decrease of 16 percent from July, as the government converted foreign currency into rubles to cover the deficit, the Finance Ministry said on Tuesday. The governments other stockpile, the National Wellbeing fund, was at $72.7 billion, compared with $72.2 billion a month earlier.
The funds are the symbol of stability, said Vladimir Miklashevsky, senior strategist at Danske Bank A/S in Helsinki. Yes, theyll be drawn down, but not to the bottom of the barrel. The deficit will be financed through other sources, or by weakening the ruble in an extreme case.
Oil producers from Norway to Saudi Arabia are adjusting to the collapse in crude prices by tapping rainy-day funds accumulated during the boom years as they seek to bolster their budgets. Russia, the worlds largest energy exporter, has amassed its reserves by funneling windfall revenue from oil and gas sales -- beginning in 2004 -- into what was then known as the Stabilization Fund. The holdings were later split in two.
The withering buffers are a challenge for President Vladimir Putin, who put on a brave face last week by saying in an interview that Russia has enough cash in the governments reserves to finance its expenses without recourse to foreign capital markets. Russia sold its first Eurobond since 2013 in May.
Under the Finance Ministrys proposals for drafting a 2017-2019 budget program, the government will fully deplete its Reserve Fund next year, while another 783 billion rubles ($12.1 billion) will be taken from the National Wellbeing Fund, originally created to cover long-term outlays for social spending such as supporting the pension system.
Putin's approval rating was dipping due to the decline of the Russian economy way back before he began his armed interventions abroad. That distracted the public and stabilized Putin's approval as long as there were 'wins' in his future wars and conflicts.That can only go so far as the more he pushed himself into a forced military situation the more harder it was for him to have further successful progress. (See Syria and Crimea)As Russia muddles through its longest recession in two decades, it racked up a budget deficit of 3.3 percent of economic output as of end-July. The Finance Ministry said 390 billion rubles from the Reserve Fund were used in August to cover the deficit. Thats on top of the 780 billion rubles taken in April-May. The government plans to spend 2.1 trillion rubles from its Reserve Fund this year.Budget Woes
Russia is preparing its budget for the next three years after the Finance Ministry proposed the fiscal gap at 3.2 percent of gross domestic product in 2017, from about 3 percent this year. It then plans to reduce it by one percentage point each year to balance the budget by 2020.
A dragged out conflict is wasteful and also not good for image shaping.
Seeing as the Russian economy is waning more quickly then expected and that Putin can only go so far to distract the Russian people, 2017 may prove to be truly interesting for him if his gambles he took around the world fails. (Gambles for oil, US politics, Syria, Ukraine, etc...)