The RF Government considered the draft federal budget for the year 2010 and the planning period of 2011 and 2012

On 23 September, the RF Government considered the draft federal law "On the federal budget for the year 2010 and the planning period of 2011 and 2012".

It should be noted that the planned volumes of budget financing stated in the draft law for the year 2010 are quite compatible with the priorities declared in the Budget Message of Russia’s President – that is, a policy of "restricting the growth of state expenditure". Thus, the cuts in the 2010 federal budget expenditure, by comparison with the 2009 level, are to amount to 1 p.p. of GDP.

Despite the overall downward dynamics of federal expenditure, some budget items continue to display an upward trend. In view of the first signs of the national economy overcoming recession and the expectations of revived economic growth in Russia from the year 2010 onwards, the State is planning to continue its support of some branches of the national economy, while intending to keep the volume of anti-crisis measures at the same level. And, although this approach is fraught with a rather significant level of budget deficit, in our opinion, it is perfectly justified, because it answers the need to both consolidate the emerging positive trends in the Russian economy and to fulfill the previously assumed long-term obligations, and in particular investments in production and transport infrastructure, and the social sphere.

At the same time, one cannot overlook the fact that, contrary to expectations, the effect of the reduced costs of the operation of the government apparatus (federal ministries and departments) due to its planned optimization will, most probably, be negligible. As a result, the increased allocations under the section "General State Issues" will amount to approximately 0.5% of GDP.

E. Fomina – Research Fellow, Department for Budget Policy