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Russia likely to run out of money next year, claims oligarch Oleg Deripaska

Moscow, RussiaEdited By: PrishaUpdated: Mar 03, 2023, 02:03 PM IST
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Russian oligarch Oleg Deripaska says Russia's money to deplete in 2024. Photograph:(AFP)

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Western sanctions against Russia are creating serious pressure, as the budget deficit forecast rise

Russian oligarch Oleg Deripaska said that Russia is likely to run out of money by 2024 unless the nation receives investment from “friendly” countries as the sanction imposed by the Westen countries continue to bite. 

An energy and metals tycoon who once held the tag of Russia’s richest person, Deripaska, said, There will be no money already next year. We will need foreign investors.”

He was speaking at an investment conference in Siberia on Thursday. The tycoon has also been impacted by the sanctions imposed by the US, UK and EU against Russia for invading Ukraine. 

He said that funds have been running low and “that’s why they’ve (the Russian government) already begun to shake us down”, according to a Bloomberg report.

He stated that Russia has been facing “serious” pressure because of western sanctions and that Moscow and its businesses need to look to other countries which have “serious resources” to invest.

“We thought we were a European country,” said Deripaska,  founder of Rusal which is the biggest producer of aluminium outside China. 

“Now, for the next 25 years, we will think more about our Asian past," he added. 

The comment comes amid warnings of the European ratings agency Scope that the budget deficit of Russia may increase to 3.5 per cent of gross domestic product (GDP), in comparison to the government’s forecast of 2 per cent of GDP. The official shortfall of 2.3 per cent was recorded in 2022. 

Scope stated that the fall was a result of lower revenues from oil and gas exports, as the West distanced itself from Russian energy.

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 “Sanctions and the war are constraining Russia’s fiscal flexibility … due to lower energy export revenues, higher war-related spending and a steady decline in GDP,” Scope stated, as per a Reuters report. 

“For now, Russia can finance its deficit relatively easily by drawing down the national wealth fund, set to amount to only 3.7 per cent of GDP by end-2024 from 10.4 per cent of GDP at end-2021," it added. 

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