Russia's Finance Ministry considering 5% cut in federal budget spending

Russia’s Finance Ministry is considering a five-percent cut in spending outlays, Finance Minister Anton Siluanov told the Russia 24 TV channel on Thursday. “The Finance Ministry is considering a budget maneuver,” he said. “Expenditures in general will not be cut. Thus, in line with the budget rule, expenditures fixed in the three-year budget will not be lowered. With account of new goals and tasks, we are considering a budget maneuver through a straight-line cut of all expenditures but for obligatory ones, such as pensions or scholarships.” He added that the finance ministry suggested that spending be cut by five percent in practically all areas. “It will make it possible to raise a pool of funds that later will be spent on priority tasks set by the government,” he noted. On Wednesday, Russian President Vladimir Putin pledged that Russia’s federal budget would not be sequestered and tasked the government to set priorities for cutting expenditures. “Sequestration is a cut in all expenditures without exception by a fixed percentage, regardless of priorities,” he said. “Such things do happen from time to time in world economies and they are stemmed from some sharp changes in the economic situation and negative tendencies in the economy. This is not the situation we are in now. We have a slight growth on the previous year, anyway. But the problem is that we forecasted a bigger growth, and given a bigger growth, we forecasted bigger budget revenues. So, initially, we planned to spend more funds on various programs.” “Now, the forecast is somewhat different,” he noted. “The economy is growing but it is growing slower. So, we will have smaller revenues, hence, we should be more careful in spending. This is not a sequestration. But we will have to make another forecast of the economic development and, based on this forecast, based on the real state of things, to outlay spending and fix priorities. I think we will have to make some cuts. And it is a task for the government.”