Russia might cut budgets with 30 percent
The Russian government might have to cut federal budgets with 30 percent in 2010 and 2011.
Prime Minister Putin has already approved the proposed cuts presented by the finance ministry, newspaper Kommersant reports.
In a recent meeting with the leader of the Federation of Independent Labor Unions, Mikhail Shmakov, Premier Putin admitted that the next three years’ budgets will be “strongly affected” by the crisis, and that revenues will drop sharply both this year and in 2010.
Originally, 2009 budget revenues were estimated to 11.7 trillion RUB and spending to 10.3 trillion RUB. Now, those figures are being substantially revised by the Finance Ministry.
Furthermore, the Russian reserve funds which the country has benefited from over the last half year, will not last all through the crisis. Finance Minister Sergey Kudrin in this week’s meeting with Vladimir Putin admitted that Russia can afford anti-crisis measures only one more year. Then reserves will get critical.
The announced 30 percent budget cut will have wide-reaching consequences for Russian economy. A number of investment projects will have to be put on hold and social spending will inevitably be affected.
