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Inflation Forecast through 2011
The first session of the Vladimir Putin government will begin today with a consideration of forecast socio-economic parameters through 2011. The Economic Development Ministry expects that document to receive formal approval today and to undergo significant reworking through August. It has been the object of objects from several ministries and agencies. However, the version submitted today will not substantively differ from previous versions.
Taking into consideration the approval by prime minister Viktor Zubkov of sharp rate hikes in the period in question, support for the poor, like education and medicine, may become a major budget expense. Budget spending on education is expected to rise to 4.4 percent of the GDP by 2011, from the current level of 4.1 percent. Spending on medicine will rise from 3.6 to 3.9 percent in that period. Financing for pension will rise by 20 percent. State R&D will rise from the present 1.05 percent to 1.3 percent.
The Economic Development Ministry acknowledges that all of those proposals will raise prices. The forecast inflation rate from this year has already been adjusted upward to 9-10.5 percent. However, the ministry is maintaining estimates of 6-7.5 percent for 2009 and 5-6.8 percent for 2011. Those figures do not take into account Russian President Dmitry Medvedev’s proposal to lower VAT.
www.kommersant.com
All the Article in Russian as of May 15, 2008
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