Bloomberg reports Ulatov, in an interview on Thursday at the Russia and CIS Capital Markets Forum in London, said Russia might face a debt crisis similar to the one gripping Greece by 2030 unless the government reduced spending.
“By 2030 the debt level would be unsustainable like in Greece” if nothing changes, he said. “Right now, we are mostly helped by oil prices and not by a very prudent macroeconomic policy.”
By 2015, Russia won’t be able to cover the shortfall in the pension fund even if oil were to reach the break-even level of $115, Ulatov said.
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Bloomberg notes that Finance Minister Alexei Kudrin this week urged the government to cap annual spending increases at 4% to stabilize public finances and avoid state “paternalism” in running the economy. The budget deficit may narrow to less than 0.5% of gross domestic product this year if the price of Urals crude averages $115 a barrel, according to Kudrin.