Something had to give, and, to Putin’s credit, it was not fiscal conservatism. This year, Russia’s budget deficit is expected to be just 2% of GDP, rising to 3.5% in 2016 – a remarkably strong performance given that the country has had to weather a trade shock and international financial sanctions. Next year, the government is set to use $40-45 billion of its reserve fund for budget financing. But Russia can afford that: its total international reserves currently amount to $364 billion, and its public debt is barely 14% of GDP.
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