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State Duma will review draft budget for 2016 in second reading

December 02, 2015, 9:31 UTC+3 MOSCOW

Spending will stand at 16.1 trillion rubles ($250 billion), revenues - at 13.7 trillion ($210 billion), and budget deficit - at 3% GDP

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MOSCOW, December 2. /TASS/. The Russian State Duma will review the draft budget for 2016 in the second reading at Wednesday’s plenary session. The draft law approved in the first reading on November 13 was amended in accordance with proposals from parliamentary factions. Spending has not been increased but financing for socially important projects has been significantly boosted along with several other spheres.

One of the main amendments concerns providing state loans to Russia’s regions. It states that next year Russia’s federal subjects will receive up to 310 billion rubles of loans instead of 140 billion rubles outlined in the first reading. Authors of the amendment, with Federation Council Speaker Valentina Matviyenko and State Duma Speaker Sergey Naryshkin among them, proposed to extend opportunities for providing loans to regions in 2016. "Money may be used to partially cover for federal subjects’ budget deficit, cover for temporary cash shortages that arise during budget execution, as well as to implement measures connected with providing disaster relief after natural disasters and technological accidents," the text of the draft law for the second reading says.

Moreover, the Committee on Budget recommended to add in the second reading the following - 50 billion rubles for construction and repair works at schools, 43 billion rubles for projects in Crimea, 9 billion rubles for supporting agriculture, and 15 billion rubles for financing science.

The third reading of the draft law on budget for 2016 will take place on December 4.

Spending will stand at 16.1 trillion rubles ($250 billion), revenues - at 13.7 trillion ($210 billion), and budget deficit - at 3% GDP. According to the basic forecast for 2016, the GDP growth will stand at 0.7% next year, inflation - at 6.4%, and average oil price - at $50 per barrel. The average yearly currency rate is estimated at around 63.3. rubles per one dollar.

The draft budget for 2016 is principally different from the document prepared in 2014. The government is forming a one-year budget for next year without considering forecasts for 2017-2018. Next year a budget rule will be cancelled that defines maximum spending in accordance with the average oil price over the last three years. The main source of financing the budget deficit will be the Reserve Fund, and the government plans to spend 2.137 trillion rubles ($33 billion) for covering the deficit.

In 2016 investment at external and domestic financial markets is expected at 393.2 billion rubles ($6 billion). The volume of net domestic government borrowings is estimated at 300 billion rubles ($.58 billion). Possibilities of net investment on the international market are expected at around $1.5 billion.

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