Interfax: Stimulus spending inadvisable in Russia – ministry

MOSCOW. Nov 28 (Interfax) – Stimulus spending to promote economic growth in Russia is inadvisable, Deputy Finance Minister Alexei Moiseyev said at a financial forum organized by business daily Vedomosti.

He said world experience has shown that stimulus spending does not lead to a significant acceleration of economic growth, and has even led to problems in a number of countries.

It is still possible to talk about the appropriateness of macroeconomic stimulus, but stimulus from the government budget is not appropriate, Moiseyev said.

He said that in Russian conditions stimulating consumption does not lead to economic growth, but to growth of inflation and imports.

“A tough, painful shakeup of economic policy is needed. A serious change in fiscal policy is needed. We at the Finance Ministry are very glad that the fiscal rule was adopted a year ago,” Moiseyev said, adding that one should not expect oil prices to climb.

He said the Finance Ministry does not expect oil and gas revenues to grow in nominal terms in the next few years, although the nominal economy will grow. The ministry will have to either increase non-oil and gas revenues through taxes or do something about budget expenditures, Moiseyev said.