MOSCOW, October 23. The current Russian budget is unbalanced even in case of low deficiency, said Minister of economic development Alexei Ulyukayev.
“A balanced budget and a deficit are two different things. I believe that you can have an unbalanced budget with a zero deficit or even a surplus, and Vice versa, a balanced budget with a moderate deficit with clear sources of its covering. It seems to me that our current budget is unbalanced that’s why”, he said at Gaidar readings.
According to the Minister, in the budget from year to year an increasing proportion of overhead costs for small direct investments in human capital. “This is a budget that is doomed, that he can’t identify landmarks of development, can not determine the priorities,” the Minister criticized the status quo. The speaker appealed fundamentally to revise the parameters of indexation, the division between protected and unprotected articles, and other approaches to budgeting.
In this year’s budget is 40% of expenditure is on defense articles, 30% on social spending. In the budget for 2016 this proportion is approximately preserved. Ministry of Finance, with the aggravation of the crisis was forced to tighten fiscal policy, which has contributed to lower inflation. The plans of the Ministry of Finance in the medium term to reach a balanced budget.
Signs of completion of the investment pause in the Russian Federation
Also the Minister of economic development sees signs of completion of the investment pause and believes that the state needs to cease “to be cautious” in taking on investment risks.
“There is emerging evidence that the investment pause may be ending,” he said at Gaidar readings in Moscow.
According to him, investors need to help make a choice. “We need to show that the risk is not excessive, that the state also is willing to take a risk,” he said.
When in Russia a foreign investor comes, he looks at the activity of domestic investors, Ulyukayev said. “A home with private investor looks at the investment behaviour of the state. If the government is overly cautious and are not willing to bear the investment risks, then it includes a button the stand bye and wait” – said the Minister.
Economic growth in the long term, which is not just the recovery growth that is a response to recessionary pause, of course can only be an investment, he added.