**Russia Slashes Budgets for Key Projects Amid Oil Price Collapse**
The Russian government is making significant cuts to budgets for major projects across various sectors, according to a recent report by the pro-Kremlin news outlet Kommersant. This move comes in response to plummeting revenues from oil and gas, which have been hit hard by falling prices.
Oil prices in Russia dropped to a two-year low earlier this month, with prices falling below $50 per barrel – about 40% lower than what was planned in the Russian budget. As a result, the Kremlin has introduced sweeping budget cuts to several state programs aimed at developing key industries such as aviation, automotive, tech, shipping, and robotics.
**Aviation and Tech Industries Hit Hard**
The state development program for Russia’s aviation industry is being cut by 22%, with its original budget of 101.2 billion rubles reduced to 78.8 billion. This program aimed to replace Western aircraft with Russian planes. Another program aiming to increase the output of Russia’s civilian goods by 40% by the year 2030 has also been targeted for funding cuts, and is set to lose 66.9 rubles in 2025.
Funds for high-tech industries will take a hit of 46 billion rubles, while the automotive industry will be slashed by 35 billion rubles. Support for innovative transport production will drop by 25 billion rubles, and funds for shipbuilding and equipment production will lose out on 12.6 billion rubles. Even programs to boost the production of industrial robots are not immune, with a budget cut of nearly a third (1.7 billion out of 5.6 billion rubles).
**Economic Downturn Exacerbated by Oil Prices**
The Russian state statistics agency Rosstat has reported that the country is experiencing a significant downturn in economic growth, exacerbated by oil prices, Western sanctions, and inflation. Oil and gas revenues accounted for nearly 30% of Russia’s budget in January and February, according to government data cited by Bloomberg.
Moreover, income from fossil fuel exports is a key funding source for Russia’s full-scale war against Ukraine. Soaring military expenditures have strained the Kremlin’s budget even as Western sanctions increasingly target Russia’s “shadow fleet” of oil tankers and the nation’s gas exports.
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