MOSCOW (AP) - A day after a top ratings agency cut Russia's rating to junk level, the government in Moscow on Tuesday announced a plan that will see the economy return to a budget surplus in 2017.

MOSCOW (AP) A day after a top ratings agency cut Russia's rating to junk level, the government in Moscow on Tuesday announced a plan that will see the economy return to a budget surplus in 2017.

Standard & Poor's downgraded Russia's rating to BB-plus late on Monday, a non-investment grade, for the first time since 2004, citing a slide in the ruble and weakening revenue from oil exports. The agency said Russia's financial system is weakening, limiting room for maneuver for Russia's Central Bank.

Russia's economy has been hit hard by the double impact of weaker energy prices and Western sanctions over its role in Ukraine. It is expected to contract by 4 to 5 percent this year for the first time since President Vladimir Putin took the helm in 2000.

Capital outflows, which averaged $57 billion annually during 2009 to 2013, soared to $152 billion last year. Foreign currency reserves have dropped below $400 billion for the first time since August 2009.

Finance Minister Anton Siluanov announced Tuesday that the government has adopted an anti-crisis plan that will freeze the level of spending. The plan also sees the budget returning to a surplus as soon as in 2017 and the government preparing structural reforms "so that we do not burn recklessly through Russia's sovereign reserves."

Siluanov criticized S&P for being too pessimistic and added that the agency did not know about the government's upcoming plan when they made the decision.

The ruble was 1.2 percent lower against the dollar at 68.1 per dollar in early trading Tuesday while the MICEX stock index was 0.3 percent higher. The ruble is now worth half as much as a year ago.

Moscow-based investment bank Sberbank CIB said in a note to investors that the long-tern market reaction to the downgrade depends on if or when the other two major ratings agencies, Fitch and Moody's, will cut Russia's grade to non-investment.

Sberbank said investors have already priced in the S&P move.

"Moreover, some investors have even postponed Eurobond purchases with the expectation that a rating downgrade would lead to lower prices, making them more attractive," the bank's Alexander Kudrin said in the note. "That said, if another agency follows S&P's lead, the negative reaction could be more pronounced."