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Russia acknowledges need for budget consolidation - minister

April 22, 2012, 17:54 UTC+3

The non-oil and gas deficit has nearly doubled to 9.6% since the pre-crisis period, Siluanov said

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WASHINGTON DC, April 22 (Itar-Tass) —— Russia acknowledges the need for budget consolidation and recommends other states not to delay such measures, according to Anton Siluanov, Finance Minister, head of the Russian delegation to the meeting of finance ministers and Central Bank heads of the G20 and the session of the World Bank/International Monetary Fund ruling bodies in Washington DC.

“Extra money supply caused a temporary improvement in the world economy. The European Central Bank issued sums equivalent to $1 trillion, which temporarily normalized the liquidity situation. The question is how long the effect will last and what impact the measure may have on further stabilization,” he said on Saturday.

“Meanwhile, fundamental economic problems are not being resolved in many countries, and debts of European states have grown in the recent months,” Siluanov said.

“Budget consolidation should be imminent. Proposals have been made at the Washington negotiations to wait until an economic improvement. However, if no such improvement occurs, a growth of state debts may require even more serious budget consolidation measures,” he said.

“Russia needs to consolidate its budget, as well. Although its debts are low (9.8% of GDP), the budget is highly dependent on crude prices. The non-oil and gas deficit has nearly doubled to 9.6% since the pre-crisis period,” Siluanov said.

“If all countries display their adherence to the optimization of expenditures, reduction of debts and dependence on crude, that would have a general positive effect on the world economy,” he concluded.

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