17 June 2004 12:29
Russian economic development minister sounds cautionary note on growth target
[Presenter] The government is starting to discuss next year's budget, today looking at the main parameters for
the country's fundamental financial document. Despite an overall optimistic forecast, next year promises to be
difficult economically. We'll get the details from our observer Vladimir Kondratyev, who is in the White House
[government building]. Vladimir Petrovich, how does the government envision next year's budget and will there be
any changes in comparison with previous years?
[Correspondent] First of all I have to say that the draft budget is being reported on alongside the socio-economic
development forecast, i.e. while [Finance Minister Aleksey] Kudrin reports on the draft budget, [Economic Development
Minister] Gref makes the forecast. These two items are inextricably linked. [Passage omitted: Prime Minister Mikhail
Fradkov opened the meeting.]
German Gref spoke next, adducing a fairly surprising figure: we know that the government was expecting the first
quarter to be pretty positive, there was talk of an 8 per cent rise in growth. On the basis of that, Putin said in his
address to the Federal Assembly that it would be possible to accelerate the process of doubling GDP. Now, Gref said, it
appears that this 8 per cent figure for the first quarter of the year needs adjusting - it is not 8 per cent, but 7.3
per cent. In other words, growth was not what the government was saying quite recently. Gref said there would be a
further slow-down in the second half of the year, this is because of a higher so-called baseline last year, when the
growth figure was higher and that's the starting-point. By the end of the year Gref expects GDP to be rising at 6.6
per cent, which is inside Gref's earlier forecast, but is not going to meet the higher target set by the president.
Nor are next year's figures comforting for the Fradkov government: there is talk of 5.9 per cent growth in GDP.
Even Gref, in his earlier outline forecast, was talking about a figure of 6.2 per cent. This means that the oil price
was lower than previously.
After Gref spoke, Kudrin stepped up to the rostrum and he has already reported on the draft budget. These are some of
the more interesting figures here: the government is said to be getting almost R400bn more in federal budget revenue
than this year, although this year the high oil prices mean that they are ahead of target, and expenditure will amount
to R2,916bn. This produces a significant surplus, which will go into various things.
I'd like to mention some specific figures. Spending on national defence next year is to be R519bn and on
national security and law enforcement R386bn. That means that military spending and spending on law enforcement
increases from 28.7 per cent to 31.1 per cent of all expenditure. Conversely, social spending - education, culture,
cinema, health, sport and social policy - gets a smaller share, down from 13.3 per cent in 2004 to just 11.5 per cent
next year.
As for the most interesting draft budget parameters for next year: the price of Russian oil on international markets
is expected to be in the region of 26 dollars a barrel - we can see a clear increase here [presumably from the 22
dollars per barrel forecast by the Economic Development Ministry], since in May this year, as Gref said, Urals oil was
35 dollars a barrel. Inflation is set at 8.5 per cent for next year, the rouble exchange rate is planned in the region
of R30.2 to the dollar.
[NTV Mir] |
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