Matviyenko: thoughtless budget cuts unacceptable

Matviyenko: thoughtless budget cuts unacceptable

The speaker of Russia’s Federation Council, Valentina Matviyenko, said that mechanical budget cuts are unacceptable and proposes not hurrying with the adjustment till the end of the first quarter.

"A reduction of budget expenditures by 10% has been being discussed by experts since the first days of January," she said.

"I think the mechanical approach, thoughtless cuts of 10%, are unacceptable," cited the speaker as saying. She believes that it is necessary to wait until the end of the first quarter in order to understand how the situation will develop.

The speaker agreed with the "number of serious analysts who say that there is no good cause for such a low price of hydrocarbons." "There are objective factors – the slowdown of the global economy, the level of oil consumption and the slowdown of the Chinese economy, but there is also a man-made factor. I mean a political component," she explained.

The speaker recalled that analysts believe that the fair price of oil right now should be varied in the range of $50-60 per barrel. "However, the price of $50 was too optimistic. And now we are forced to prepare various scenarios of budget adjustments, considering the probability of a further fall in oil prices," Matviyenko said.