Russian PM warns of long-term austerity budget

Russia has to stick to the austerity budget for a long period of time due to persisting unfavorable conditions, Prime Minister Dmitry Medvedev said Wednesday.

The budget for 2016-2018 has been drafted with difficult scenarios and negative predictions, as the budget parameters are mainly determined by the economic situation, he told a government meeting.

"We need to stay realistic ... and prepare a budget that will adequately respond to existing challenges," which includes falling oil prices, economic slowdown and continuous western sanctions, an online official transcript quoted Medvedev as saying.

Noting that the budget's main objective should be ensuring macroeconomic and social stability, Medvedev ordered the government to fulfill its social obligations regardless of difficult economic situation and limited budget resources.

However, the government possessed "few options" to increase financing of a number of programs in the coming years, Medvedev pointed out when suggesting to "promptly" list the projects that can be postponed until better times in order to optimize expenditure.

As the EU decided on Monday to extend anti-Russian sanctions by six months, Russian Central Bank on Tuesday promised that it would protect financial stability in the domestic market even in the worst-case scenarios.

In January, Russia adopted a 38-page anti-crisis austerity plan, which is designed to ensure economic development and social stability amid unfavorable economic conditions.

Many western countries have introduced restrictive measures in response to Russia's alleged "destabilizing role" in the Ukrainian crisis, which Moscow repeatedly denied and stressed that the concept of sanctions is counterproductive. Endite