Moscow: Russia said Wednesday it will slash budget spending by 10 percent this year due to sliding oil prices as Prime Minister Dmitry Medvedev insisted the country must "live within its means".
The renewed austerity calls came as the price of oil, Russia's key export commodity, hovered around $30 (28 euros) a barrel, and with economic decline a particular concern for officials ahead of parliamentary polls this year.
"The basic principle of our policies should stay the same: one must live within one's means, including by cutting budget spending," Medvedev told an economic conference in Moscow.
"It has been a long time since our economy has been hit with such forceful and synchronised challenges" he said, citing oil prices and Western sanctions against Russia over its role in the conflict in Ukraine.
"With economic difficulties, the temptation is great to slide into populism and capitalise on topics that are sensitive for voters," he said. "It's always easy to promise a radiant future, but promises must be delivered."
Speaking at the same event, Finance Minister Anton Siluanov said that the government is going to cut 10 percent of budget spending this year, warning that failure to do so would have a catastrophic impact on the Russian people.
"In the current difficult conditions, we must speak of a very thrifty, strict budget policy, in order not to end up with high deficit levels or a high volume of debt," he said.
Russia's 2016 budget -- over half of which relies on revenues from oil and gas exports -- is based on an oil price of $50 a barrel and a deficit of three percent, which President Vladimir Putin has ordered must not be exceeded.
Siluanov said the oil price would have to rise to $82 to fully balance this year's budget.
He cautioned against expecting a "price rise (for oil) in the immediate future," while economy minister Alexei Ulyukayev predicted that oil prices would remain low for "a very long time."
While last year's budget deficit was 2.6 percent, this year is expected to be more difficult.
The government has been forced to dip heavily into its reserves and abandon support for the ruble, which has slid in value.
The economy has also been pummelled by Western sanctions imposed due to Moscow's meddling in Ukraine, as well as Russia's counter-measures which included an embargo on key food imports.
Budget cuts have already affected the interior ministry, which announced layoffs of about 10 percent of its workforce.
Annual inflation in 2015 reached 15.5 percent and food prices grew more than 19 percent on average, with fruit and vegetables becoming 29.5 percent more expensive, the state statistics service said this week.
In a poll conducted in late December, most Russians (58%) said they could afford food and clothing, but had difficulties purchasing more expensive items like appliances, pollster Levada Centre said Wednesday.
The renewed austerity calls came as the price of oil, Russia's key export commodity, hovered around $30 (28 euros) a barrel, and with economic decline a particular concern for officials ahead of parliamentary polls this year.
"The basic principle of our policies should stay the same: one must live within one's means, including by cutting budget spending," Medvedev told an economic conference in Moscow.
"It has been a long time since our economy has been hit with such forceful and synchronised challenges" he said, citing oil prices and Western sanctions against Russia over its role in the conflict in Ukraine.
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"With economic difficulties, the temptation is great to slide into populism and capitalise on topics that are sensitive for voters," he said. "It's always easy to promise a radiant future, but promises must be delivered."
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Speaking at the same event, Finance Minister Anton Siluanov said that the government is going to cut 10 percent of budget spending this year, warning that failure to do so would have a catastrophic impact on the Russian people.
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"In the current difficult conditions, we must speak of a very thrifty, strict budget policy, in order not to end up with high deficit levels or a high volume of debt," he said.
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Russia's 2016 budget -- over half of which relies on revenues from oil and gas exports -- is based on an oil price of $50 a barrel and a deficit of three percent, which President Vladimir Putin has ordered must not be exceeded.
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Siluanov said the oil price would have to rise to $82 to fully balance this year's budget.
He cautioned against expecting a "price rise (for oil) in the immediate future," while economy minister Alexei Ulyukayev predicted that oil prices would remain low for "a very long time."
While last year's budget deficit was 2.6 percent, this year is expected to be more difficult.
The government has been forced to dip heavily into its reserves and abandon support for the ruble, which has slid in value.
The economy has also been pummelled by Western sanctions imposed due to Moscow's meddling in Ukraine, as well as Russia's counter-measures which included an embargo on key food imports.
Budget cuts have already affected the interior ministry, which announced layoffs of about 10 percent of its workforce.
Annual inflation in 2015 reached 15.5 percent and food prices grew more than 19 percent on average, with fruit and vegetables becoming 29.5 percent more expensive, the state statistics service said this week.
In a poll conducted in late December, most Russians (58%) said they could afford food and clothing, but had difficulties purchasing more expensive items like appliances, pollster Levada Centre said Wednesday.
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