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MOSCOW, April 20. /TASS/. If Russia had no sovereign reserves it could have been forced to slash military spending by half and reduce retirement benefits by one third amid current environment, the former Russian Finance Minister and the head of the Civic Initiatives Committee think tank Alexey Kudrin said Wednesday.
"Without this reserve [sovereign reserves - TASS] we would have been forced to cut military spending at least by half already today and decrease wages and pension payments by 20-30% straightaway if there were no reserves," he said, adding that "today those reserves are underestimated."
If the oil price remains at the level of $40-50 per barrel Russia’s budget deficit will reach 4.5-5% of GDP, Kudrin went on to say, adding that this will be the biggest challenge for the Russian economy for the nearest 3-4 years.
"[Russia will face] the biggest challenge for 3-4 years if the oil price remains at the current level of $41-43 [per barrel] or even surge to $50 (per barrel) within three years, even in this case the country’s budget system will have deficit of around 4.5-5% amid commitments made earlier," Kudrin said.