Russian prime minister warns of tough financial situation, back to 3-year budget

(Interfax – October 2, 2015)

The Russian government faces a difficult task in putting together a budget which will be very tough, Russian Prime Minister Dmitry Medvedev has said, privately-owned Russian news agency Interfax reported on 2 October.

“The economic situation in the country has changed a great deal in the last year; clearly, living in conditions of 50 dollars a barrel is after all a bit different from the situation with 110 dollars a barrel. For some it’s a minus, for others it’s a plus, including from the devaluation effect,” he said, at a meeting with business leaders at the Sochi economic forum.

“It’s clear that now the government faces the fairly difficult task of putting together a budget – there is only a week left to put it together, it needs to be ready in a week’s time. It is a tough one, very tough, but at the same time adequate for the situation we’re in,” he said.

The government is trying to preserve the main macro-economic indicators, he said.

“You know, the fight against inflation remains a fairly essential one for the government, and not increasing the deficit, against those numbers which we set for ourselves as relatively dangerous. We consider that three per cent is a relatively dangerous figure, we won’t drive the deficit up above this,” he said.

Medvedev also promised business leaders that the government would not change the main “rules of the game” regarding the economy, Interfax said in a later report.

“Maintaining the rules of the game, this is what worries business most of all – will the government stick to the rules or somehow alter them. I want to say directly to you, we proceed from the supposition that we will observe those parameters which have been declared previously, including in the tax sphere and regulatory environment,” he said.

Taxes will not rise for business, he said.. “In addition, I have decided (the government) will stop considering a series of non-tax payments from 1 January 2019,” he said.

Medvedev’s comments came as the Finance Minister, Anton Siluanov, announced that the ministry will return to the previous practice of calculating three-year budgets next year (2016), state-owned TASS news agency reported.

“One-year budgets are an extraordinary measure. So, next year we’ll do everything necessary so that the budget will be in three-year format, so we’ll be able to forecast on a longer perspective,” he said.

[featured image is file photo]