Russia's Vice Premier, Finance Minister Alexei Kudrin
Photo: Valery Levitin
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Budget Curtain Extended for a Year
The government sanctioned yesterday the transfer of 475 billion rubles in budget spending for the next year and the 90.7-percent spending execution by this year’s result. So, Finance Minister Alexei Kudrin proved able to defuse the triple tension. The additional spending, the so-called budget curtain of 1.5 percent of the GDP, has been extended for the whole next year, the threat of skyrocketing inflation in early 2008 has diminished and the election promises of President Putin have been kept precisely.
Vice Premier, Finance Minister Alexei Kudrin reported to the government yesterday about the nine-month execution of the budget. The cash execution was just 3.5 trillion rubles, or 83.4 percent of the target. Moreover, the calculation was based on the previous plan for the budget spending that was set at 5.6 trillion rubles. But the spending target went up to 6.5 trillion rubles after the recent adjustment that President Vladimir Putin OKed November 24, 2007.
The funds appropriated under the federal target programs are traditionally drawn unevenly in the course of the year. Nowadays, this trend has coincided with the need to boost the costs because of election promises of the president, including the promise to step up the capital of development institutions by 550 billion rubles and drive up the social costs.
Kudrin approached the problem in an elegant style and was upheld by the cabinet. Finance minister suggested stepping up the costs formally but nearing them to the initial target in effect. The 2007 budget spending will be 5.9 trillion rubles, or 90.7 percent of adjusted target, while 474.5 billion rubles (roughly 1.5 percent of the GDP) will be transferred to 2008. The destiny of 135.8 billion rubles that the departments have failed to spend so far is yet unclear. This money will either go to the Stabilization Fund or transferred to the next year.
What’s more, the peak of spending by development institutions (they will get 550 billion rubles under 2007 budget) will be noticed no sooner than in 2009, Kudrin assured. These institutions will have to spend money on the market “with restricted freedom” without creating "liquidity problems.”
www.kommersant.com
All the Article in Russian as of Nov. 29, 2007
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