Budget must effectively saturate economy with liquidity amid credit squeeze - Putin

MOSCOW. April 18 (Interfax) - The Russian budget must effectively saturate the economy with liquidity amid the current credit squeeze, Russian President Vladimir Putin said at a meeting on economy issues.

"It is extremely important at the moment to support domestic demand, to avoid excessive reduction in it. We must act both through the budget system and to ensure greater availability of loans for business. As for the budget, I know the discussions that take place between the Central Bank and the government, nevertheless, in conditions of an objective credit squeeze, of course, the budget must actively support the economy, saturate the economy with financial resources, support its liquidity," Putin said.

The opportunities for this exist, the president said. "Of course, we must act carefully, we and the Minister [Finance Minister Anton Siluanov] are constantly talking about this, but, nevertheless, the first quarter of this year saw a record-setting budget surplus. We need additional solutions here, and we need to implement them at the exact moment the economy needs it most," he said.

At the end of Q1, the federal budget surplus amounted to 1.1 trillion rubles, Putin said. "And in the regions, too, the aggregate surplus is somewhere around 1 trillion rubles, 0.9 trillion rubles," he said.

"Of course, we have to be careful, I understand. But the key condition, of course, remains the long-term sustainability of the financial system both at the federal and regional levels," the president said.