Russia's Finance Ministry has published its budget policy outline for 2011-2013, the Kommersant business daily reported on Friday.
In order to cut the budget deficit to 3 percent of the consolidated budget by 2013, the ministry proposes a growth in national debt, but local and regional debts will be limited. In return, it proposes to create local stabilization funds and increase privatization. An example to the regions is the federal center that was demonstrated already in 2010, with ships and ports being sold off.
The economic parameters of Finance Ministry Budget Policy Guidelines for 2011-2013 are based on its June macroeconomic forecast. It will be assessed in September taking into account changes in industrial output and consumer prices.
"According to the ministry, if the Russian economy grows at 4 percent in the next ten years, and the federal budget deficit is maintained at around 3 percent, then by 2020 the state debt will reach 33 percent of GDP as against the current 10 percent. In this case, federal budget spending will grow to 3-4 percent of GDP at borrowing rates of 6-8 percent," Kommersant quoted Finance Minister Alexei Kudrin as saying.
According to Kommersant, the main source of the federal budget deficit reduction will be domestic state bonds. The draft budget already contains earnings from privatization - 298 billion rubles (almost $10 billion) in 2011, 276 billion in 2012 and 309 billion in 2013. The government will decide on a privatization list for 2011-13 only in September. RIA Novosti
