The main financial document of the country will retain a social orientation
Prime Minister Dmitry Medvedev announced the completion of the government’s work over the main financial document of the country for the next three years (2017-2019). In the near future, the draft budget will go to the State Duma. In the lower house, it may be submitted already on October 28.
— We will continue a policy of maximum deterrence of inflation, this year it fell by almost half: from almost 13% in December 2015 to 6.9% in August 2016. Thus, we were able to preserve and protect from devaluation of wages, pensions, social benefits, payments. This is a positive trend that should be supported. The Bank of Russia plans to reduce inflation to 4% by the end of next year and after that keep it at this level. This is an ambitious goal, — said Dmitry Medvedev.
The Prime Minister noted that, in discussing the draft budget for the next three years, had including come from retaliatory measures imposed by Russia against the West in response to sanctions. Budgeting was selected as the conservative scenario of socio-economic development of the country: the price of oil to $40 per barrel in 2017, 2018-2019 — $55 per barrel.
We came from very conservative estimates of future price fluctuations of oil, it is also, of course, caused controversy. Nevertheless, I think this approach is correct in order for the income of state employees — teachers, doctors, and anyone else who receives money from the budget — less dependent on commodities, the Prime Minister said.
Separately, Prime Minister raised the issue of the budget deficit, which according to the draft budget is 2,744 trillion rubles.
− On the mechanism of deficit financing there are different opinions. We need to act, of course, very carefully. To constantly live in debt, as some States, we can not afford, he said at a meeting with members of the government. − Deficit of 2.7 trillion rubles, or slightly more than 2% of GDP. Such a deficit generally adequate to the current state of the Russian economy. This is less than we expected at the end of this year.
To reduce the budget deficit the Ministry of Finance proposes to carry out fiscal consolidation, reducing it gradually to 1% of GDP per year, and to gradually bring spending in line with revenues.
Dmitry Medvedev said that the government will fulfill all social obligations to citizens, no matter how evolved economic situation. The Prime Minister promised that the indexation of pensions and social payments will be held in February 2017 and will be implemented on the actual level of inflation in 2016.
We discussed the issue of the additional fiscal burden on the oil and gas sector in the years 2017-2019, which, however, should not prevent companies to grow.
— We’ll continue to improve the system of excise duties and taxation of mining, but it should be done so that the additional fiscal burden did not affect the investment program and does not interfere with the companies to develop, to explore, to master the field, the Prime Minister said.
The Ministry of Finance in tax policy priorities for the 2017-2019 provided for the increase in the tax burden on the oil and gas industry. The Agency proposed to clarify the procedure for calculating mineral extraction tax on oil, adding to the formula of its calculation to the new element specified for 2017 in the amount of 306 rubles, in 2018 — 357 rubles in 2019 — 428 rubles. While the Finance Ministry stated that it will not lead to a significant increase in the tax burden on oil production as a whole.
Also the government expects that the economic situation in the country next year will allow the Central Bank to continue to develop its credit activity.
This year the Bank of Russia has twice reduced the key rate. We expect that the economic situation next year will allow us to continue the policy of stimulating credit activity, — said Dmitry Medvedev.
According to the Prime Minister, it is necessary to create conditions so that people’s savings went into investments.
— For this, we have confidence in the banking system. We try to give him maximum support, — noted the head of government.
According to the head of the Cabinet of Ministers, low and stable interest rates allow for more confident business planning, consumer spending, including the purchase of real estate, education, treatment and other things.
Director of the RAS Institute of Economics Ruslan Grinberg believes that the desire to reduce inflation to 4% will not solve all problems.
— It is necessary to anticipate the factors that can alter oil prices. Now we need to think about the revival of the economy. To change the economy through the financing of large infrastructure projects and mega-projects, for example, building high-speed railway that will connect Europe and Asia. That is to create a Eurasian zone of development, this would have involved a private business.
Head of Department of stock markets and financial engineering of Ranhigs Konstantin Korischenko believes that the current policy of the Central Bank reduces inflation and interest rates. In his view, this affects the reduction of external debt.
— The budget for the next three years is characterized by the fact that he has virtually no growing costs. Also it has a very conservative oil price, and we have reason to believe its possible growth. Therefore, it is likely that the budget revenues in connection with the likely increase in oil prices will be a little more.