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State Duma raises budget revenues, expenditures for 2012, thus decreasing its deficit

The Gross Domestic Product (GDP) is projected to go up from 58.683 trillion roubles to 60.59 trillion roubles in 2012
Photo ITAR-TASS
Photo ITAR-TASS

MOSCOW, May 25 (Itar-Tass) — Russia’s State Duma has adopted a law to update major parameters of the federal budget for 2012, which was caused by the implementation of the state budget in 2011 and January-March 2012. The indices were calculated on the basis of the projected results of the country’s socio-economic development and the budget implementation in the current year.

Proceeding from the updated indicators of the socio-economic development, the Gross Domestic Product (GDP) is projected to go up from 58.683 trillion roubles (USD 1 = RUB 31.76) to 60.59 trillion roubles in 2012.

The Urals oil blend price is forecasted at 115 U.S. dollars per barrel, instead of 100 U.S. dollars per barrel. The year’s average dollar exchange rate is established at 29.2 roubles per the U.S. dollar, instead of 28.7 roubles per the U.S. dollar. The salary fund should be at 14.75 trillion roubles instead of the initial level of 14.472 trillion roubles.

In the mean time, the consumer inflation rate remains unchanged at the level between five and six percent.

The federal budget revenues increased by 897.1 billion roubles to 12.677 billion roubles, of them 808.4 billion roubles account for the oil and gas incomes and 88.7 billion roubles for non-petroleum revenues. The federal budget deficit was cut from 1.5 percent to 0.1 percent of the GDP.

From the additional oil and gas revenues, about 500 billion roubles are planned to be spent for the decline of internal borrowings, while the remaining part will be used for the increase of the Reserve Fund, whose amount was at 2.657 trillion roubles at the end of 2011 (under the Finance Ministry’s estimate). Besides, the Russian Reserve Fund and the Sovereign Wealth Fund are projected to accumulate 8.7 percent of the GDP by the end of the year.

The federal budget expenditures were increased by 88.7 billion roubles to 12.745 billion roubles owing to the hike of the non-oil and gas revenues.

With due account of the additional non-oil and gas revenues and the projected retrenchment, 135.6 billion roubles was offered to be assigned for the social security, improvement of the population’s living conditions, growth of salaries and wages, development of ITC, modernisation, upgrading, re-equipment, capital repairs, contributions to international organisations, investments and hosting of international events.

Chairman of the State Duma Budget and Taxation Committee Andrei Makarov (United Russia) drew attention of reporters that this was the first amendment to the federal budget, in the discussion of which the Communists and LDPR factions not only took an active part, but also supported the changes.

Moreover, the State Duma adopted a related decree, which envisages its priorities in the budgeting process, Makarov said.