The Budget Day in Russia has come. Finally, the income and expense pro forma for 2014-2016 is approved by the government! In light of the latest events, the country is heading to tighten the monetary policy as some deep cuts were made. Thus, complied with the document, the shortfall in 2014 will reach 391.4 million rubles, or 0.5% of GDP, with incomes of 13,569 trillion and expenditures of 13.96 trillion rubles. According to the prime minister, the document turned out really tough as it reflects the real situation in the Russian economy and global markets. “We will have to cut our expenditures, but not to the detriment of our main plans. Well-thought-out use of funds, a kind of budget rationalism should become obligatory for the whole budget system,” Dmitry Medvedev said. In addition, he commissioned analyzing efficiency of the government spending and providing government procurement transparency. Officials suppose that Russia is now grappling with a slowdown which resembles the year of 2008 when the crisis hit – the pace of economic growth dropped down amid negative readings of investment programs and industrial production. “This year Russia’s GDP growth is below the global median for the first time. This is a red flag for us,” the Minister of Economic Development Aleksey Ulyukaev noted. In addition, due to lower output in non-oil sector which is expected in 2015, the treasury revenue will slash to 7.6 trillion rubles from 8.3 trillion.
