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Tuesday, February 20, 2018

During the presidential campaign, the budget deficit could double

Despite the fact that difficult times for the Russian economy seem to be behind, the key discussion of the budget in 2018-2020 in the walls of the White house wore not public. The document on which the Ministry was working with spring, at the Cabinet meeting was introduced by Dmitry Medvedev, managed not to call any numbers. Conceptual financial plan the three-year period, according to him, rests on three pillars — creating the conditions for sustainable economic growth, the implementation of all social obligations to the citizens and the preservation of the moratorium on increase of taxes. Given the fact that in the 2018 elections and before the elections, the most important is the stability of the reference points selected it is absolutely true that society and business received from the government a signal that no reforms and upheavals are expected. “In any economic environment social obligations will be fulfilled, all the necessary resources provided,” the Prime Minister said.

On 29 September, the draft budget will be submitted for consideration to the state Duma. Usually it looks like this. Photo: Boris Tumakov

“Social obligations” include the implementation of “may decrees” of Vladimir Putin, adopted after the previous election cycle in 2012. For a long time, power fluctuated enough regions have resources to provide, as promised by the President, the growth of public sector wages by 100-200% by early 2018. But in the end decided that enough is enough. Otherwise Vladimir Putin, it’ll be difficult to promise people during the next election campaign.

The lack of funds in the regions is decided by infusions from the back of the Ministry of Finance: additional 100 billion rubles for payments to state employees will give the Federal budget. “Now the main task of the departments — to quickly and proactively to bring these tools to their institutions that they are from the first months of the following year began to pay the new tariffs,” — noted in the Ministry of Finance. In General, the cost parameters for 2018 in comparison with those envisaged in the law on the budget, will grow to 300 billion rubles, This figure also includes the increase in the minimum wage, the need for which last week said Vladimir Putin. By the way, this initiative it is possible to write in the list of “gifts for voters” because “minimal” will bring up to 85% of the minimum subsistence level from 1 January 2018, i.e. to the beginning of the active phase of the election campaign.

Another one is clearly not accidental “gift” to journalists after the Cabinet meeting, told labor Minister Maxim Topilin. As you know, by law, pensions must be indexed by the amount of actual annual inflation forecast which was recently downgraded to 3.2%. However, the government decided not to krugovorot and what is really there, increase the pensions to the inflation, which was expected, i.e. by 3.7%. According to the Minister, to carry out the indexing will not as usual from 1 February, and on 1 January 2018, to “provide a more meaningful increase in real pensions.” However, the attraction of pre-election generosity of this measure is clearly drawn: in terms of rubles, the difference of 0.5% is less than 70 RUB for each retiree (based on average size of pension in Russia in 2017 13.7 thousand rubles). In Moscow on the money, even a bottle of yogurt not every store will buy. Meanwhile, other social payments will be increased, as expected, February 1, at the level of actual inflation. And working pensioners will once again be without indexation: the government believes that the salaries they receive, the overlap inflation. And in General, elderly people are not forced to work. “It’s their choice”, — stressed the head of the Ministry of Finance Anton Siluanov. It is noteworthy that the lowering of the forecast for inflation will not affect the planned growth of tariffs of natural monopolies. Here the Cabinet is manipulating the numbers in the opposite direction, arguing that the focus should not be on the actual inflation and the target.

According to Siluanov, the main directions of expenditures of the Federal budget in 2018 will be the social sphere, which will have more than 36% of the total appropriations, defense — 29% and the national economy at 14.7 per cent. In his opening remarks, Dmitry Medvedev said that the government’s task is to make the positive trends developing in the Russian economy, sustainable and long-term at the expense of the state, and most importantly, private investment. “Will be expanded concessional lending to small and medium business, seriously updated the PPP due to the infrastructure of the mortgage will receive the development and implementation of digital technologies”, — the Prime Minister promised. However, the structure of the economy, according to the draft budget, will not undergo significant changes: the share of the public sector, under threat 70%, reduce not planned privatization revenues will amount to less than 10 billion rubles per year. “A conservative forecast. Privatization of large companies the budget is not worth it, but everything is possible,” confirmed the head of the Ministry Maxim Oreshkin. Dividends paid by state-owned companies, will bring the budget 400 billion rubles Until the financial plan is a deduction of 50% of net income for all, including state-owned banks. However, as we know, he has a habit of changing depending on the lobbying power of company executives. Siluanov acknowledged that the decision on the dividend for concrete structures will be taken later in the preparation of the directives of the vote.

In General, the revenues of the Federal budget in 2018 is planned in the amount of 15.1 trillion rubles, expenses — of 16.5 trillion rubles, the deficit will thus amount to 1.3 trillion rubles., or 1.37 percent of GDP. It’s better starting positions, with which Vladimir Putin went to the polls in 2012, then the budget deficit was 2.7% of GDP, which, however, has not deterred the candidate from generous campaign promises. The results of the election campaign, independent economists, including experts of the world Bank, estimated the value of the “gifts for voters” in the amount of 9 trillion rubles for the six-year period. The first amendment to the budget was introduced in may 2012. Now the government also does not rule out budget adjustments for the tasks of the election campaign, but prefer not to think about it. “The three-year budget adopted in the actual execution and the necessary resources are provided. We must move away from the practice of annual adjustments under external factors,” — said Anton Siluanov. But in this case, as they say, only the Ministry of Finance proposes and positioning is not even a God, but a specific person with a name that the country will know no later than Dec.


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