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    Russian Government Submits ‘Harsh’ Budget to Parliament

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    The government’s 2014 budget, which Prime Minister Dmitry Medvedev has described as “very harsh,” was submitted to Russia’s State Duma on Monday.

    MOSCOW, September 30 (RIA Novosti) – The government’s 2014 budget, which Prime Minister Dmitry Medvedev has described as “very harsh,” was submitted to Russia’s State Duma on Monday.

    According to the document, which also includes projections for 2015 and 2016, Russia is set to record a budget deficit of 391 billion rubles ($12 billion) in 2014, rising to 817 billion rubles ($25 billion) the following year.

    Financial planning in recent months has taken place against a backdrop of slowing economic growth, which the government expects to fall to 1.8 percent this year, its lowest level since the 2009 financial crisis.

    Medvedev warned that budget cuts between 2014 and 2016 could amount to 5 percent in some areas and described the upcoming budget as “very harsh” when it was approved by the Cabinet earlier this month. President Vladimir Putin has said that budget expenditure will have to be lowered to account for reduced growth forecasts, but that a sequester – a series of automatic budget cuts – is not on the table.

    The budget document weighs 15 kilograms, and runs to 11,000 pages, 1,500 pages longer than last year, according to the head of the Duma’s budget committee Andrei Makarov, RBC news agency reported.

    “We can already see that budget income will be less than previously forecast figures, which means expenditures will have to be optimized as much as possible,” Sergei Naryshkin, speaker of the State Duma – the Russian parliament’s lower chamber – told reporters Monday. “A lively and interested business discussion stands before the Duma.”

    Finance Minister Anton Siluanov told Putin during a government meeting Monday that more than 2.1 trillion rubles ($64.8 billion) has been earmarked to honor a series of social spending commitments – the so-called May decrees – made by Putin immediately after his 2012 inauguration for a third presidential term, the Prime news agency reported.

    And Defense Minister Sergei Shoigu said that the budget would not mean any reduction in Defense Ministry planning. “We drew up all the state’s armament programs through 2020 quite carefully,” said Shoigu, according to Prime, “[and] both the quantities and timeframes remain unchanged.”

    While social spending and defense are among protected parts of the budget, areas such as health, education and culture will face cuts, former Finance Minister Alexei Kudrin, who has been critical of current spending plans, said earlier this month.

    “This is not a [budget] structure that will lead to economic growth,” Kudrin told an international conference at Valdai in northwest Russia on September 19.

    Government expenditure in the budget is set to rise from 14 trillion rubles ($432 billion) in 2014 to 15.4 trillion ($474 billion) in 2015, and 16.4 trillion rubles ($506 billion) in 2016. The budget is based upon an average oil price of $93 a barrel in 2014 and $95 a barrel in 2015 and 2016, as well as average annual inflation of 5 percent in 2014 and 4.5 percent in 2015 and 2016.

    The budget is likely to receive its first reading by deputies on October 25, Makarov said, Prime reported. The Duma is legally obliged to consider the budget within 60 days of its submission.


    budget, State Duma, Dmitry Medvedev
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