“This year we will have to get used to living in new macroeconomic circumstances, as external factors have aggravated the situation in the country’s economy and its structural problems,” Kovtun said at a meeting with heads of local authorities, according to Murmanskiy Vestnik.
The regional government plans to cut spending on publicly funded institutions and programs and also cut the number of publicly employed staff by 10 percent in 2015, SeverPost writes.
The lack of long-overdue structural reforms in the country’s economy has been considerably aggravated by foreign sanctions, falling oil prices and the ruble exchange rate, the governor said and warned that everyone has to be ready to tighten the belt. Heads of the local authorities in the region were urged to go through all expenditures to see where money could be saved and where more taxes could be collected.
The consolidated debt of the regional budgets (including municipal) in Russia increased by 20 percent in 2014 and exceed 2 trillion rubles, Minister of Finaces Anton Siluanov said, according to Vedomosti.
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The governing idea in Kovtun’s speech was that the people should be protected from significant reductions in living standards during the economic hardships.
Murmansk Oblast is although better off than other Russian regions. More than one fourth of the budget incomes are from the mining industry, which for a large part exports its products. “Thanks to this, we were not particularly affected by the crisis that started in 2008. But the current [crisis] is a lot more serious, and therefor our optimism is very cautions,” Kovtun said according to Murmanskiy Vestnik.
