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Russia moves $16,480,480 from culture projects to its reserves

Christian Fernsby ▼ | July 12, 2020
More than 1bn rubles earmarked by the Russian government for cultural projects have been redirected to its reserves as the country battles the coroanvirus crisis.
Moscow street
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The money was originally due to be spent on modernising cinemas as well as holding festivals and exhibitions, as part of a national project called ‘Culture’.

Topics: Russia

As part of the plans, 200 cinema halls were supposed to be renovated, but that has now dropped to 60, while festivals will now be “more local” and will only take place where lockdown measures have been completely lifted, deputy culture minister Olga Yarilova said.

She said the 1.168bn rubles ($16,480,480) saved will be sent to the reserves, according to Russian news agency Tass.

Russia has been hit hard by the pandemic, and its public finances were already beginning to strain under the plummeting price of crude oil, which dropped by 65% between January and April this year – although this was followed by a partial recovery.

The general government budget deficit is expected to be 7.2% this year, to be financed by historical oil revenues saved in its National Wealth Fund, which is separate from the reserve fund that will benefit from the redirection of the Culture budget.

According to Russia’s fiscal rule, when oil falls below a benchmark price, the government can withdraw an amount equal to its oil and gas revenues from the NWF to supplement the shortfall.