MOSCOW: Year 2009 will be the worst for the Russian economy since the World War-II, with the country's national budget deficit touching the USD 70
billion mark, says the Finance Minister.
"2009 will be the most difficult for the Russian and world economies. I cannot remember a worse year since the end of the Second World War. This will be the worst year for the economy in modern times," Russian Finance Minister Alexei Kudrin said last night in a TV interview.
Kudrin, who holds the rank of vice-premier in the cabinet of Prime Minister Vladimir Putin told state-run Vesti TV channel, "In 2009, the budget will have a deficit of 1.5 to two trillion rubles, which we will have to make up from the national Reserve Fund".
Kudrin's statement virtually acknowledges the bankruptcy of Putin's economic model based on high oil prices, with oil windfall fueling the rapid re-emergence of the former Communist country as a global power.
Earlier, the Kremlin aide Arkady Dvorkovich said that the budget deficit could exceed five per cent of GDP in 2009 if the economy does not begin to recover by the middle of the year.
"If the situation follows a negative scenario and the economic recession lasts throughout next year, the deficit could exceed five per cent," he said.
During eight years of Putin's rule of consolidation of the state power, the Kremlin had been reluctant to introduce democratic reforms to give economic liberties to the common man, which in the situation of global economic crisis could spark off massive protests and unrest in the country.