Putin in battle with bugget deficit
The Government of the Russian Federation will again be able to reach the cherished 4 percent budget deficit in 2011, even under the most stringent economies, said Reuters. At the end of last year, Putin’s cabinet approved the main features of the budget for 2010-2012, which provide for the deficit be reduced by 6.8 percent of gross domestic product (GDP) to reach 4 percent in 2011 and to 3% in 2012 Originally the government planned budget deficit for 2010 is not more than 5 percent of GDP, but preliminary and comparative data, it will even increase by 2% to 7% annually. “Even if you implement the most violent measures, which provides the Finance Minister Alexei Kudrin, but unfortunately no one seriously considered, I will not be achieved cherished 5 percent,” said a senior source from Reuters Economic Office. Two days ago during a conference dedicated to federal financial programs targeted for 2011, Prime Minister Putin said that in coming years the budget should be prepared on a conservative basis and move gradually to reduce the budget deficit. He did not report specific numbers, which is defined as a setback for the program previously applied to reduce the deficit to 3% by 2012. According to Reuters the source of the meeting were not taken any concrete decision, because two weeks should be reviewed all programs and reduce their limits, because the “hole” in the budget is already 600 billion rubles (over 14 billion euro).
“There are investment schemes developed for 1,2 trillion. rubles in federal target programs, and now they need to be shortened by about 600 billion rubles, specify the source of information from the Ministry of Finance. In the 2010 budget for these programs were planned 740 billion rubles, but due to strict budget framework the Ministry of Finance does not exclude the possibility not only to reduce investment, but also to reduce some social costs, although Putin has consistently said not to touch the public expenditure. Moreover, the Prime Minister rejected the proposal last week the Treasury to abandon planned by 6.3% indexation of pensions under threat and even the budget to go further in the red over the planned reduction of 6.8 percent of GDP this year.
Tags: battle, bugget deficit, Putin, Russian Federation, Vladimir Putin