26.03.09

The government published a corrected forecast of the socioeconomic development in 2009. It is based on the assumption that the average annual Urals price will remain at the level of $41 a barrel. Judging by the document, budget revenues will amount to 6.71 trillion rubles (down 4.21 trillion rubles). Budget costs will amount to 9.69 trillion rubles (+7.4%). Budget deficit will reach 8% of the GDP at the most, inflation level 13%.

Unfortunately, not even the deficit budget will cushion the fall Russian economy is about to take. Decrease in production is expected at the level of 7.4% of the GDP in general (decline in processing industry at 9.7%).

Oil and gas production will go down and reduce export (2%). Gas production will end up at between 2.9% and 6.5% below what it was in 2008.

The Cabinet will meet later today to discuss ways and means to aid national economy. The government formulated seven priorities which it thought would help in dealing with the crisis. The theses would be offered for nationwide discussion. The priorities in question begin with aid to the population (first and foremost to the poor and socially vulnerable strata), preservation of industrial and technological potential of economy, activization of domestic demand, lower administrative barriers interfering with free enterprise, war on corruption, aid to small and medium businesses, and assistance to the national financial system.

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Source: RBK Daily