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Economic Development Ministry predicts balanced budget in long-term prospect

The debt may be compensated for mostly with domestic sources

MOSCOW, April 13 (Itar-Tass) —— The Economic Development Ministry predicts a balanced budget in the long-term prospect with the moderate (1.5%-2%) deficit until 2025, Deputy Economic Development Minister Andrei Klepach said on Friday. He said the budget would have a deficit only if the innovative development model was chosen.

Additional allocations for healthcare, education and science (2% GDP) are planned in the period until 2020, alongside 0.5% GDP for the economy (transport infrastructure included) and1% GDP for defense and security. Optimization of budgetary expenditures will be done mostly with the curtailment of subsidies (housing and public utilities included) and a relative cut of managerial expenditures. As a result, budgetary expenditures will grow from 37.1% GDP in 2011 to 37.8% GDP in 2020 under the innovative development model. In that case, the budget will still have a deficit, and the state debt will grow to 20-25% GDP. However, the debt may be compensated for mostly with domestic sources.

The conservative (raw material) scenario implies a limited increase of social expenditures, allocations for healthcare and education, with a declined spending on science, technologies and transport infrastructure. Consequentially, the conservative scenario cuts budgetary expenditures from 37.1% GDP in 2001 to 34.9% GDP in 2020. In this case, the federal budget will have no deficit after 2015.

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