Moscow - The Russian Finance Ministry on Wednesday cut its oil forecast to 50 dollars per barrel for next year as the global financial crisis drags down demand for the country's largest export.

"This is substantially lower than what has been fixed in the budget," Finance Minister Alexei Kudrin told lawmakers in a televised meeting. The federal budget was pegged to a price of oil of 95 dollars for 2009, one of the world's highest forecasts among oil exporting countries.

Kudrin said the shortfall would be compensated with funds from the 135-billion-dollar reserve fund which had been created for the purpose by the state to insure against a drop in oil prices.

A high-expenditure budget up till 2011, including a 25 per cent hike in military spending, was approved by parliament Tuesday based on pre-crisis, high oil-price estimates.

Kudrin's comments also came after the government headed by Prime Minister Vladimir Putin promised over 200 billion dollars in anti- crisis measures to minimize the worst financial hit the country has felt since the national currency default in 1998.

Kudrin added that the state's take would grow smaller each year due to declining oil and gas production in Russia. For the years after 2011, the Finance Ministry has kept its forecast at about 70 dollars per barrel. (dpa