IMF resident representative in Russia Neven Mates, left, chief of the IMF mission Paul Thomsen, right, have familiarized themselves with the rates of Russia’s inflation.
Photo: Grigoriy Sobchenko
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IMF Stakes on Kudrin
The International Monetary Fund (IMF) has released an official report of its mission that held ten-day consultations in Moscow starting from May 22. The report was much tougher than the IMF position made public in Moscow. The IMF experts insist that Russia’s economy is overheated and specify that the inflation resulted from inadequate actions of the government is a greater threat to the GDP growth than the potential decline in crude prices. IMF backs up Russia’s Finance Minister Alexei Kudrin in his opposition to the growth in budget spending.
The IMF mission completed its work in Moscow in late May but the report on the state of Russia’s economy was released only on Monday. The conclusions echo official statements made at the news conference by results of the work of the IMF mission as well as the latest conclusions of the World Bank and OECD. They emphasize overheat of Russia’s economy and call for tougher monetary and budget policy to curtail inflation and secure stable economic growth.
At the same time, one of proposals of the IMF experts is sensational. The mission suggests ensuring non-execution of the 2008 budget, as it happened in the previous years – the federal budget costs were short-financed by 8.4 percent of the target in 2007. But the 2008 budget is likely to be executed in Russia.
The RF Finance Ministry hasn’t taken the advice. “We cannot shorten appropriations planned by the budget. The limits could be imposed at the planning stage. But artificial non-execution of target costs is impossible. The failure to execute target costs is the low level of budget management,” said Alexei Lavrov, who heads the budget policy department of the Finance Ministry.
The IMF experts back up Finance Minister Alexei Kudrin and urge the government to proceed with easing tax and budget policy. The mission suggests revising the proposal on the increase in the 2008 budget spending by 0.3 percent of the GDP, which the RF government has approved already.
www.kommersant.com
All the Article in Russian as of June 11, 2008
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