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Russian parliament to approve budget cuts

April 10, 2015, 11:01 UTC+3 MOSCOW
The government uses the forecast of the average annual Urals oil price totaling $50 a barrel and the dollar rate of 61.5 rubles as a basis
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© Sergey Savostiyanov/TASS

MOSCOW, April 10. /TASS/. Members of the State Duma will vote today in the third reading for amendments to the 2015 federal budget suggested by the government. Budget items will be slashed by 10% on average. This is the first Russia’s budget subjected to sequestration since 1998, First Deputy Chairperson of Budget and Taxes Committee Oksana Dmitrieva said on Friday.

The government uses the forecast of the average annual Urals oil price totaling $50 a barrel and the dollar rate of 61.5 rubles as a basis. The November version relied on the oil price of $96 a barrel and the exchange rate of 37.7 rubles a dollar.

"We are actually cutting the budget. The budget was with surplus even in 2008. Only 2009 and 2010 budgets were deficit-ridden but even the 2009 budget was performed because of an error in revenues. The average annual oil price was projected as $40 a barrel but it actually amounted to $60 a barrel. All the recent years, starting from 2000, showed an error in understating revenues. The nominal budget cut did not take place on account of the inflation," the parliament member said.

The federal budget revenues in 2015 will be slashed by 16.8% to 12.54 trillion rubles ($245 bln) and the expenses will be 2% lower and total 15.2 trillion rubles ($296.7 bln). The budget deficit earlier planned at 0.6% of GDP will reach 3.7% of GDP or 2.7 trillion rubles ($52.8 bln).

Budget items are slashed unevenly. "Certain items of expenditures will grow, accordingly, the other ones will be reduced even further. Public education and health expenditures will be contracted and these already lower than a year earlier," Dmitrieva said.

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