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PM Medvedev to hold meeting on main approaches to 2017-2019 budget

June 15, 2016, 5:04 UTC+3 MOSCOW

This year the government operated within a one-year budget due to the crisis, but it was reported earlier that the government would return to a three-year budget next year

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MOSCOW, June 15. /TASS/. Russian Prime Minister Dmitry Medvedev will hold a meeting on the main approaches to the formation of the federal budget for 2017 and the planning period of 2018 and 2019, the Russian government press service said on Wednesday.

First Deputy Prime Minister Igor Shuvalov, Deputy Prime Minister Arkady Dvorkovich, Finance Minister Anton Siluanov, Economic Development Minister Alexei Ulyukayev, as well as the Central Bank Head Elvira Nabiullina will attend the meeting.

This year the government operated within a one-year budget due to the crisis, but it was reported earlier that the government would return to a three-year budget next year.

In early June, Siluanov said that the Finance Ministry was going to advocate for an annual decline of the budget deficit in 2047-2019 by 1 percentage point, which "means 3%, 2%, 1% of the budget deficit for the following years." This will "maintain the reliability and stability of the budget." In 2016 the budget deficit was approved at the level of 3% of GDP with expenditures of about 16 trillion rubles ($241.84 bln), revenues - 13.7 trillion rubles ($207.07 bln), but the authorities do not rule out growth of the indicator to 3.3-3.4% of the GDP.

Deputy Finance Minister Maxim Oreshkin said earlier that the Ministry is trying to use two anchors of fiscal policy in a three-year budget: the budget rule and the gradual fiscal consolidation. In particular, the Ministry considers it necessary to introduce the budget rule, which would imply collecting excess profit from oil process in the reserves as a protection measure of the economy from the external market fluctuations. In addition, the Finance Ministry is actively working on proposals on reducing certain types of expenses, as well as increasing the revenue base of the budget through the improvement of tax management.

The draft budget will be developed based on the updated macroeconomic forecast of the Economic Development Ministry until 2019. According to the forecast, GDP next year will grow by 0.8% against decline of 0.2% in 2016. At the same time, in 2018 the economy may grow by 1.8%, in 2019 - by 2.2%. This trend is expected at an average annual oil price of $40 per barrel. The Economic Development Ministry forecasts growth of the average annual exchange rate in 2017 to 64.8 rubles per dollar against 67.2 rubles per dollar in 2016, in 2018 - to 64.1 rubles per dollar, in 2019 - to 62.7 rubles per dollar. Inflation is also expected to slow from 6.5% this year to 4.9%, 4.5% and 4% in 2017-2019, respectively.

This year, according to the approved amendments to the Budget Code, the Government can introduce a draft law on the Federal Budget for 2017-2019 to the State Duma a month later - before November 1, not before October 1 - due to the upcoming elections to the lower Chamber in September. The document was published on the legal information portal.

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