Russian Prime Minister suggests federal budget cut amid economic downturn

Russian Prime Minister Dmitry Medvedev on Friday suggested that the country's 2016 budget be slashed and a host of projects be scrapped amid economic downturn.

"We will assess what expenses could be cut, and they must now be substantially cut, unfortunately," Medvedev said at a meeting on execution of 2016 federal budget.

The government would also decide what projects should be abandoned or postponed, said Medvedev. He also asked all ministries and departments to make detailed proposals on cost reduction and downsizing.

While urging to mobilize budget revenues, particularly in terms of privatization and reduction of receivables, the prime minister said expenditures should be adjusted to meet expected revenues and "to ensure delivery of social commitments and finance protected items even in such a challenging budget situation."

Medvedev stressed the importance of reducing the share of oil and gas sector in export and budget revenues "no matter how the situation unfolds."

He urged to support certain industries and economic sectors with high potential for enhancing import substitution and improving general economic situation, while disclosing supportive measures would be carried out in such sectors as car manufacturing, transport machine building and light industry.

"These sectors all faced substantial contraction of demand for their products," Medvedev said.

Western countries have imposed rounds of sanctions against Russia over Moscow's alleged involvement in Ukraine crisis.

The prime minister on Wednesday admitted amid low oil prices and economic sanctions, the situation in Russian economy is complicated but manageable. Endit