Canadian Manufacturing

Russia feeling the pinch as it depletes rainy day fund

The Russian economy is now facing a couple years of predicted contraction

MOSCOW—Russia says it’s likely to deplete one of its two rainy day funds by the end of next year as tries to plug the state deficit amid the economic downturn.

The economy, battered by low energy prices and Western sanctions, entered recession this year after its 2009 economic recovery.

Finance Minister Anton Siluanov told the parliament that the Reserve Fund, which holds 4.7 trillion rubles (US$74 billion), will likely be cut in half by the end of the year with oil prices as low as they are—and be depleted by the end of 2016.

The other fund, now at $4.9 trillion rubles, is largely used to support infrastructure projects.

The Russian economy is forecast to contract by 3.9 per cent this year and grow by 0.7 per cent next year.

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