Russian State Duma passes 2011-2013 budget at first reading

10:52, October 21, 2010      

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Russia's parliament, the State Duma, approved the federal budget for 2011-2013 at the first reading on Wednesday, local media reported.

The State Duma adopted a budget for 2011 and draft budgets for 2012-2013, which allocated little money for modernization and innovations, the RIA Novosti news agency reported.

Instead, the lion's share of the expenses, equivalent to about 100 billion U.S. dollars, will be poured into social security measures. These funds comprise one third of the 10.7-trillion- ruble (about 356 billion dollars) federal budget.

The budget deficit amounts to 3.6 percent of the gross domestic product (GDP), while half of the deficit is contributed by the Pension Fund.

The state increased spending for pensions, child benefits, students scholarship, as well as for defense and law enforcement, environmental protection, fuel and energy industry. At the same time, expenses on transportation infrastructure have been cut by 25 percent.

Customers' inflation may reach 10 percent in 2011, against the 6.5-percent forecast by the Financial Ministry, according to independent experts. This will be an additional break for modernization and another factor preserving the economic model based on raw material export, the analysts say.

Russia's Financial Ministry said the budget would be balanced if oil price reaches 109 dollars per barrel in 2011.



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