Medvedev: suspending budget rule to help preserve sovereign funds
MOSCOW. Sept 9 (Interfax) - The temporary suspension of the budget rule will make it possible to preserve Russia's sovereign funds, Prime Minister Dmitry Medvedev said at a government meeting on Wednesday.
Last week, the Finance Ministry said it planned to draw up the budget on a one-year rather than a three-year basis due to heightened volatility on financial and commodities markets. For the same reason, it will submit the draft budget to the State Duma at a later date than was the case in previous years. Finally, plans are to ignore the budget rule's stipulations for 2016.
"I would like to note that we discussed the draft bill amending certain provisions of the Budget Code at a number of meetings. Notably, it proposes suspending the action of the budget rule until next year. This mechanism has played a positive role. It has made it possible to amass the sovereign funds - the Reserve Fund and National Welfare Fund - in order to ensure the stability of the financial system, meet social commitments, which was done. But given the current low price of oil, we need to preserve the reserves and to a great extent rely on other sources," Medvedev said.
"This year the budget will be special. It was drawn up for one year, as we agreed. The situation in our economy and in the global economy remains quite complex and unpredictable. We were already returning to a one-year budget planning cycle because high volatility on the markets reduces the reliability of revenue and spending projections. The temporary departure from a three-year cycle to a one-year cycle will make it possible right now to rely on a more refined forecast for macroeconomic indicates and reckon with current trends," he said.
