Putin urges to cut Russia's economic dependence on oil prices

Russia's President Vladimir Putin said Tuesday the country's economy should be less dependent on prices of oil.

"It is necessary to ensure the balance and sustainability of public finance, and to reduce significantly the budget's dependence on oil prices," Putin told a government meeting on Russia's 2016 budget, which should be presented to the parliament in October.

According to Putin, Russia's economic situation was difficult, but not critical. He went on suggesting a series of measures to overcome the economic recession, using the budget as one of the most important tools to reach this goal.

He stressed that projects funded by the budget, including various import substitution programs, should stimulate economic growth, according to an online official transcript.

Another priority of the government, within the framework of fiscal policy, should be the fulfillment of its social obligations, Putin said.

"The federal budget should finance the solution projects of most important issues related to health, education and science. Such state expenditures must fully meet the requirements and demands of the society," he said.

At the same time, the support from the budget, especially in social sphere, should be more concrete and target first of all the most vulnerable citizens, Putin added.

The president said that the budget deficit for next year should not exceed three percent of GDP, which is unchanged comparing with this year's target.

Earlier on Tuesday, the Russian Bureau of Moody's projected Russian GDP to decline by four percent in 2015 and by 1 percent in 2016 amid slow recovery of oil prices.

Russia's Ministry of Economic Development in August predicted that economic performance of 2015 might be worse than expected considering western sanctions against Moscow would remain in place until 2018.

The ministry also downgraded Russia's GDP forecast for 2016 from the earlier 2.3-percent growth to a growth of 1.0 to 2.0 percent. Enditem