Piggy bank

The president said that around 1.9 trillion rubles ($59.5 billion) had been accumulated in a reserve fund to shore up the country’s finances in the event of a crisis, while the 2013 budget includes a piggy bank of cash that can be quickly accessed in case of emergency.

Putin did not determine the exact size of the funds set aside, but sources in the Finance Ministry later told Vedomosti that the figure was around 200 billion rubles ($6.3 billion), adding that a similar sum had been put aside in this year’s budget.

The Economic Development Ministry has carried out stress tests to check the economy’s resilience to drops in the oil price, with one scenario checking the implications of a drop to $80 a barrel, and another checking for $60 a barrel.

Under the first scenario, economic growth would drop to 0.5 percent of gross domestic product, compared to around 4 percent in the second quarter of this year, according to Vedomosti. Under the second, it would shrink by 2.7 percent.

The tests also found that capital flight would increase to around $50 billion under the first scenario and $80 billion under the second, compared to some $85 billion in 2011.

Ministry dispute

While the Economic Development Ministry says the second scenario is highly unlikely, the Finance Ministry has called for the economy to also be tested for resilience to an even lower oil price, such as the $40 a barrel recorded at the peak of the 2008-09 global financial crisis.

The breakeven oil price where Russia balances its budget has been steadily rising in recent years, from around $53 a barrel in 2008 to $116 a barrel now. At the beginning of this week, Brent crude was hovering at around $114 a barrel, but a slowdown in global growth could bring this crashing down, analysts warn.

Sources in Russia’s two biggest banks, state-owned Sberbank and VTB, told Vedomosti they were making preparations for a potential crisis, saying they expected to feel the first symptoms in the autumn .(2599 печ зн)

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