The government, facing an economic slowdown, will have to focus its spending efforts on priority areas, Prime Minister Dmitry Medvedev said Monday.
Medvedev was addressing a meeting of a fiscal planning commission at which new figures were released showing that federal spending would rise by only 3 percent in nominal terms next year.
That represents a sharp slowdown from spending growth of 17.8 percent last year, stoked by pre-election spending that helped President Vladimir Putin win election for a third presidential term.
"It's obvious that, in the difficult current circumstances, we need to concentrate resources on key programs," Medvedev said. "I also hope it is obvious to everyone that it will also be necessary to spend efficiently."
Medvedev's comments echoed the tone set by Putin in his annual budget statement on June 13, when he said the government could not continue to raise spending forever.
The Finance Ministry is likely to run a small budget deficit in the next three years, thus breaking Putin's promise of balancing the budget till 2015.
Putin reshuffled his economic team on Monday, and his new economy minister, Alexei Ulyukayev, said his primary task in government would be to stave off a possible recession.
Economic growth, at 1.8 percent in the first five months of the year, has fallen to its slowest pace in four years.
Under the draft three-year fiscal plan, the pace of nominal spending growth will pick up in 2015 and 2016. Finance Minister Anton Siluanov should submit his budget to parliament in the fall.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
