The so-called inflation overhand of the state spending deferred to the fourth quarter is much higher this year than it was in the previous years.
Photo: Vasily Dyachkov
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Govt Gets Into Inflation Overhang
The deferred spending in Russia’s economy neared 500 billion rubles in the first nine months of this year, according to preliminary data on federal budget execution. So, the state revenues may surge in the fourth quarter.
The nine-month revenues of the federal budget were 4,557 billion rubles (23.5 percent of GDP), cash spending totaled 2,872 billion rubles (14.8 percent of GDP), Prime-TASS reported the preliminary data Thursday referring to the RF Finance Ministry.
But the budget revenues were estimated at 3,731 billion rubles, and the spending was to reach 3,359 billion rubles from January to September of this year.
The difference between the actual spending and the estismated one equals 487 billion rubles. So, the spending was just 85.5 percent of the estimate vs. 95.3 percent past year and 93.3 percent in 2004. Therefore, the so-called inflation overhand of state spending deferred to the fourth quarter is much higher this year than it was in the previous years, and the inflation risks that are high enough already will be even higher at the end of this year.
A portion of money unspent will be deferred to the next year, but the amount won’t be big. “Only 137 billion rubles explicitly specified in the 2007 budget will go to the next year,” said Oksana Dmitrieva, member of the State Duma’s Budget Committee.
But the unspent amount will be much bigger actually – more than 900 billion rubles, according to the Audit Chamber of Russia. The remainder could go to the Stabilization Fund, of course, but the recipients of budget money will try hard to spend the funds at the end of the year, driving the prices up as a result.
Should it happen, the ruble appreciation of 1 percent to 3 percent would be the sole lever to oppose inflation risks in the following half-year, the analysts forecast.
www.kommersant.com
All the Article in Russian as of Oct. 13, 2006
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