Russia may alter spending plans for a series of national goals promoted by President Vladimir Putin two years ago as the spread of the coronavirus slashes budget revenues.
Putin’s spokesman Dmitry Peskov said on May 3 that the goals, known inside Russia as the National Projects, will still be a priority for the government and that the “adjustments” will not impact their implementation.
“It is obvious that when drawing up the national plan for the development of the economy, those tasks, those budget expenditures that were planned in connection with national projects, will be taken into account,” Peskov told state TV.
Russia’s economic growth is expected to tumble by more than 5 percent this year, according to the International Monetary Fund (IMF), as the spread of the coronavirus decimates oil demand. The decline would be the steepest for the Russian economy since 2009.
Oil exports account for a significant portion of Russia’s revenues, with the federal budget breaking even at an oil price of around $42 a barrel. Russia’s Ural crude blend currently sells for half that price.
As it faces lower budget revenues, the country will face rising social payments as unemployment spikes with the closing of shops, restaurants, and other businesses amid the pandemic.
Putin announced the National Projects -- a massive $400 billion spending plan -- at the start of his second six-year term in 2018. The National Projects aim to boost living standards by 2024 and focus on 13 key policy areas, such as health care, education, and infrastructure.
Russians have seen a decline in living standards since 2014 due to falling oil prices and Western sanctions that were imposed in response to the Kremlin’s aggression against Ukraine and alleged interference in U.S. elections.
The Russian government led by Prime Minister Dmitry Medvedev was criticized last year for slowly implementing the National Projects. Putin in January tapped Mikhail Mishustin to replace Medvedev.