Russia's parliament today approved a first reading of a budget that would cut spending in key sectors, a move that has sparked fears it could cripple the nascent recovery.
The 2017-2019 budget was approved by a 334-to-100 vote in the State Duma.
It must pass two more readings before it can be approved by the senate and President Vladimir Putin.
Putin - who became president less than two years after the country defaulted on its foreign debt in 1998 - has pledged to keep the country's finances under control despite a sharp drop in energy prices.
The draft budget aims to reduce the deficit to 3.2 per cent of the GDP next year, before reducing it to 2.2 per cent in 2018 and 1.2 per cent in 2019.
But reducing the deficit comes at a high price that includes significant cuts in a wide array of sectors ranging from education to military spending.
Economists now fear that spending cuts could hinder Russia's efforts to pull itself out of a two-year recession caused by Western sanctions and depressed energy prices.
Russia's Chamber of Commerce and Industry said that the draft budget represents a "risk for growth prospects", while the Union of Industrialists and Entrepreneurs said it was a "stabilisation and stagnation" budget rather than one focussed on growth.
The Duma's Communist and nationalist factions also slammed the draft budget, with long-time Communist party leader Gennady Zyuganov telling Russian media that it was "anti-social" and would "inevitably lead to a political crisis".
Finance Minister Anton Siluanov meanwhile defended the budget's austerity, saying it was a "condition to guarantee solid growth."
Ministries will see their overall funding cut by six percent next year, before it is further slashed by nine per cent in 2018 and by 11 per cent in 2019.
Funding for the defence ministry - heavily involved in a bombing campaign in Syria in support of Russia's long-time ally Bashar al-Assad - is also being cut significantly, although not as much as for other ministries.
The draft budget aims to reduce military spending to 2.9 per cent of the GDP by 2019, down from the current 4.7 per cent.
This figure, however, does not account for the "secret funds" that are handed to the ministry to bolster the army.
Some analysts say that in spite of calling for cuts, Russia will struggle to curb military spending.
Military spending nearly doubled in the last decade, reaching USD 66.4 billion last year, according to the Stockholm International Peace Research Institute (SIPRI).
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