Medvedev will hold a meeting on amendments to the budget in 2016 for the second reading

MOSCOW, November 11. The Chairman of the government Dmitry Medvedev will hold on Wednesday a meeting to discuss amendments to the second reading of the draft law “On Federal budget for 2016”.

The meeting will be attended by first Deputy Chairman of RF government Igor Shuvalov, Deputy Prime Minister Sergei Prikhodko, Olga Golodets, Arkady Dvorkovich, Dmitry Kozak, Yuri Trutnev, and Alexander Khloponin, the Russian presidential aide Andrei Belousov, Finance Minister Anton Siluanov, economic development Minister Alexei Ulyukayev.

The state Duma will consider the draft Federal budget for 2016 at the plenary meeting on Friday, November 13.

The budget for 2016 is fundamentally different from a similar document that was drafted in 2014. Next year, the government draws up the annual budget, not reviewing the forecast 2017-2018. Also for next year cancelled the effect of budget rules, according to which the maximum level of expenditure shall be determined on the basis of the average for the previous three years the price of oil.

According to the document, the expenditure budget next year will amount to 16 trillion 098,7 billion rubles., revenues – 13 trillion 738,5 billion rubles, the deficit – $ 2 trillion 360.2 billion rubles, or 3% of GDP.

Forecast revenues of the Federal budget is formed based on the changes of tax and customs legislation. In particular, take into account decisions about the conservation in 2016, the rates of export customs duties on oil at 2015 (42%), as well as increasing the tax on extraction of minerals for gas and gas condensate to Gazprom.

In addition, the revenue forecast for 2016 reflecting the additional revenues from management of Reserve Fund and national welfare Fund in the Federal budget and increase to 90% profit share of the Bank of Russia, payable to the state Treasury.

As the main source of financing of deficit of the Federal budget was the Reserve Fund. To cover the deficit from the Fund in 2016 it is planned to spend 2,137 trillion rubles.

Hoteistitania traditionally been the main source of financing the budget deficit, however their chance will be significantly limited: in the domestic financial market due to declining demand from the financial sector and the risks of deteriorating terms of borrowing; the external debt markets – due to the ongoing sanctions against Russia.

In 2016 the net raising of funds on the domestic and foreign financial markets is planned in the amount 393,2 billion rubles, the volume of net public internal debt of the Russian Federation will amount of 300.0 billion rubles, and net possibilities of raising funds on the international capital market is estimated at $1.5 billion.

An important feature of the draft Federal budget for 2016 is the budget allocations not only in the context of state programmes and their subprogrammes, but also on major activities of state programs.

As for the forecast for the years 2016-2018, in the baseline scenario next year GDP growth at 0.7%, inflation is projected at 6.4%, while the average annual oil price of 50 dollars per barrel. The average annual exchange rate used in the budget for 2016, is projected to be 63.3%.