MOSCOW, June 3 (UPI) -- Higher prices for crude oil will ease pressures on the financial issues facing Russia, said Russian Prime Minister Vladimir Putin.
The Russian economy relies heavily on oil and natural gas. The recession that battered world economies in 2008 caused demand and energy prices to plummet, leaving Russia's federal budget in shambles.
Putin told a Cabinet meeting that the Russian economy was on the right path as oil has averaged $70 per barrel for 2010, state-run news agency RIA Novosti reported. The federal budget for 2010, he said, was based on $58 per barrel.
"We can make greater headway in solving our main financial problems," he said regarding energy pricing trends.
Finance officials in Moscow said the country would have a budget deficit in 2011 of around 4 percent of the gross domestic product with oil at $70 per barrel. It would be closer to 8 percent of GDP if prices dropped to $50 per barrel.
Alexei Kudrin, the Russian finance minister, said in May that the budget would be balanced at $95 per barrel.
