Russian Prime Minister Dmitry Medvedev has ordered the government to cut spending and said the Russian economy faces serious risks concerning the budget after sharp decrease in oil prices
"The figures in the budget now already seem excessive,” Medvedev said in a government meeting on Friday.
"The dramatic move in the oil prices which we see over recent weeks creates highly serious risks for budget fulfillment."
The budget for this year expected an average oil price of $50 for a barrel and a budget deficit of 3 percent of gross domestic product (GDP).
Russian Finance Minister Anton Siluanov has already declared the oil price estimation to be revised to $40 for a barrel.
"We need to adjust the expenditure part of the budget, bringing it in line with expected incomes."
He did not exclude a further drop in oil prices, especially based on the anticipated lifting of sanctions against Iran.
Moscow stock exchange falls by 5 percent, hits ruble
The Moscow stock exchange on Friday dropped five percent while the country's currency hit a new low.
The dollar-denominated Russian Trading System (RTS) index fell 5.03 percent at 1140 GMT, while Russia's ruble remained at 77.73 against the dollar and stood 84.71 against the euro for the first time since the currency decrease of December 2014.
Speaking at an economic forum in Moscow, PM Medvedev said on Wednesday that high-interest rates were one of the critical issues in front of Russia’s economic expansion and the budget would have to be checked if oil prices continue to decline.
Oil prices, below $30 a barrel, have continued to crash for seven consecutive days, for the first time since the financial crisis in 2008 and recording 18 percent loss since the beginning of this year.
As oil prices continue to fall to 12-year lows in the first trading week of 2016, Russia is expected to go through tough days, due to its oil export dependent economy.