8 Dec 2010 14:05

Sobyanin: Moscow will reduce borrowing, raise investment

MOSCOW. Dec 8 (Interfax) - The Moscow city government plans to continue cutting back on borrowing, especially commercial borrowing, Moscow Mayor Sergei Sobyanin said at a session of the city legislature on Wednesday.

"Budge policy must be responsible. Unfortunately, in 2009 alone Moscow's state debt doubled to 243 billion rubles from 121 billion rubles. Obviously, it was a crisis year and the borrowing was probably justified," he said.

But the city authorities must follow through with efforts to cut the debt, he said.

"Already this year we have cut the borrowing stipulated in the budget. We have cut another 50 billion rubles in borrowing from the 2011 budget. That will cut borrowing for the budget by about 116 billion rubles, Sobyanin said.

The cuts are aimed at enabling the city's economy to recover. "We are working with the Finance Ministry to replace commercial borrowing with three-year budget borrowing," he said.

In addition, the city budget must increase investment, in order to justify the borrowing. "If the budget contains zero investment, then the borrowing won't have any benefit," he said.

The initial draft budget for 2011 stipulates 231 billion rubles in investment or 18% of the total budget, he said.