Russia Cuts Key Aviation, Tech, and Auto Projects Amid Plunging Oil Revenues

Posted at | Categorised in economics, government of russia, oil and fuel prices, russian, russian politics

The Russian administration is cutting funds for significant initiatives across various fields due to declining income from oil and natural gas, according to reports from the pro-Kremlin media source Kommersant on May 22.

Earlier this month,

oil prices

In Russia, prices plummeted to their lowest point in two years. The cost dipped beneath $50 per barrel, which is roughly 40% less than what was projected in the Russian budget, as stated by Reuters on May 6th.

Following the price crash, the Kremlin has implemented extensive reductions to various state initiatives as reported by Kommersant. This includes schemes aimed at advancing Russia’s

aviation

In the realms of automotive, technology, logistics, and robotics sectors.

The state plans to reduce the aviation development program by 22%, decreasing the initial budget of 101.2 billion rubles to 78.8 billion. The objective of this initiative was to substitute Western aircraft with local alternatives.

Russian

planes.

A initiative designed to boost Russia’s production of consumer goods by 40% by 2030 has faced budget reductions and will see a cut of 66.9 rubles in 2025.

The allocation for the country’s “high-tech industries” will decrease by 46 billion rubles, funding for the automotive sector will be reduced by 35 billion rubles, and financial backing for “innovative transportation manufacturing” will fall by 25 billion rubles. Support for product development will also see cuts.

ships

And shipping equipment will miss out on 12.6 billion rubles.

A initiative to increase the output of industry

robots

will have almost one-third of its budget cut (1.7 billion out of 5.6 billion rubles).

The Russian federal statistics service, Rosstat, announced on May 16 that the nation is facing a

substantial decline in economic expansion

, worsened by oil prices, Western regions

sanctions

, and inflation.

Nearly 30% of Russia’s budget in January and February was attributed to oil and gas revenues, as indicated by government data referenced in reports.

Bloomberg

Furthermore, revenue generated from exporting fossil fuels serves as a crucial financial resource for Russia’s comprehensive military operations.

war against Ukraine

.

Soaring

military expenditures

have put pressure on the Kremlin’s finances despite escalating Western sanctions

target Russia’s “shadow fleet”

regarding oil tankers and the country’s

gas exports.

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