The president was not distracted from his macroeconomic worries by Deputy Prime Minister Alexander Zhukov's (in photo) announcement of record GDP growth.
Photo: Dmitry Azarov
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Federal Budget May Be Changed
In spite of Deputy Prime Minister Alexander Zhukov's jubilation over record growth of the GDP, Russian President Vladimir Putin said at the meeting of the government at Zavidovo that he is concerned about the country's macroeconomic stability. He has yet to sign the budget for 2008-2010 and has already stated that expenditures from it may need to be “corrected” in acknowledgment of new problems with inflation.
Although the investment boom in the country is continuing, and industrial growth is at a peak, inflation in July may increase by 1 percent, which will considerably complicate government plans to hold it down to 8 percent for the year. The president made it clear yesterday that he is prepared even for unpopular measures such as cutting budget spending in order to contain inflation.
The government meeting was closed to the press and only key statements by the president have been made public, on which government agencies are not willing to comment. Changes to the structure of the 2008-2010 budget, which is awaiting the president's signature, would require it to be submitted to the parliament again. A likely way to stretch out budget expenses would be to delay financing for new institutions, such as the fund for the reform of public utilities, the Development Bank and Rosnanotekh.
The president's statements are also likely to have a dampening effect on proposals for new government investment projects. First Deputy Prime Minister Sergey Ivanov unexpectedly announced at that meeting that the government would not create a state machine tool holding, a project that already the support of the Ministry of Industry and Energy.
www.kommersant.com
All the Article in Russian as of July 25, 2007
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