Russia to reassess government budget taking into account coronavirus risks

Russia’s new Prime Minister Mikhail Mishustin has called on the government to analyze both long-existing sanctions risks and the consequences stemming from the coronavirus epidemic as it works on a new budget plan.

“When forming key [budget] indicators, it is necessary to carefully analyze all risks, both the previous ones that were linked to sanctions and the possible new ones due to the reaction of the global economy to the coronavirus,” Mishustin said on Monday. He added that the government should consider “all measures” to mitigate the impact of the disease.

The rapid spread of the new coronavirus, also known as Covid-19, beyond China has sparked widespread fears of an economic downturn​​​. Last week, stock markets suffered their worst collapse since the 2008 financial crisis. At the same time oil futures fell to the lowest levels in more than a year over fears that the virus will erode oil demand, as China is one of the major importers of crude.

Now the Organization of the Petroleum Exporting Countries (OPEC) is expected to support the market during the meeting later this week. Hopes that the members and allied major oil producers will agree to deepen output cuts sent crude prices higher on Monday, with both global benchmark Brent and WTI rising around one percent.

On Sunday, Russian President Vladimir Putin held a meeting with the country's energy officials and the heads of major oil and gas companies to discuss the situation on global energy markets. While the current prices are acceptable for Moscow, he said that the cooperation with OPEC is “an efficient tool for ensuring long-term stability.” However, he did not reveal if the Russian delegation will support any further cuts during the upcoming talks in Vienna.

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