“We must prepare for worst-case scenario in economy”

If the oil prices are to fall even more, we will have to adjust our fiscal parameters the prime minister said at the annual Gaidar Forum on economics on Wednesday. “We have to brace ourselves for the worst scenario, as other countries do,” RBC reports. “The basic principle of our policy must remain the same - we must live within our means.” 

Russia’s 2016 budget was made in October on the assumption of $50 a barrel for oil prices. The prices right now is about $30 per barrel, but many analysts say it could even drop below $20.

Taxes from oil and gas generates about half the Russian government’s revenue.

Economy Minister Aleksey Ulyukayev told the forum that the low prices could last for years and even decades. He said that officials are now making plans to cut federal spending by 10 percent.

Following two years of only slight growth, the Russian economy in 2015 contracted almost 3,8 percent.