Russian Cabinet OKs Draft Budget (Russia's third surplus budget)

AP ^ | Thu Aug 15, 6:36 PM ET | AP

[Destro]

Russian Cabinet OKs Draft Budget

Thu Aug 15, 6:36 PM ET

MOSCOW (AP) - The Cabinet passed a budget proposal for 2003 Thursday that raises spending for national defense and the court system, Russian media reported.

"It is a strenuous budget, which takes into account a possible growth of risks connected with the world economy," Deputy Prime Minister Alexei Kudrin was quoted as saying by the ITAR-Tass news agency, referring to a possible drop in international oil prices.

He pledged that there would be no deficit.

Revenues are expected to top $77.4 billion and expenditures are projected at $77.2 billion. It is slated to be Russia's third surplus budget.

Kudrin said that the government hopes to avoid foreign borrowing next year, but will reserve the right to issue up to $1.25 billion in Eurobonds. Russia will face a peak in foreign debt interest payments of $17.5 billion next year.

The government will aim to keep inflation between 10 percent and 12 percent, and the Cabinet is banking on a ruble exchange rate of 33.7 to the U.S. dollar — approximately 2 rubles higher than the current rate.

Kudrin said the draft sets proposed national defense spending at $11 billion, or 14.9 percent of overall spending, according to ITAR-Tass. He said defense spending would increase more than any other article and that the money would be used to finance higher pay in the military, more contract soldiers and purchases of military equipment.

Russian Prime Minister Mikhail Kasyanov also said that the government would earmark 33 percent more funds for the court system, which is undergoing reform, and promised more money for law enforcement, science, technology, and education, the ITAR-Tass news agency reported.

He said that the government would also try to cut taxes after it has gotten its debt payments in order. The Cabinet will forward the budget to the lower house of parliament, the State Duma, by Aug. 26, Kudrin said.

[Destro]

Russia's third surplus budget accomplished with a 13% falt income tax all done while fighting a war in Chechnya? Not bad.

[Destro]

With tax cuts on the horizon, even!!!

[weikel]

Im going to move to Russia someday. The homeland of Ayn Rand seems to becoming the dream of Ayn Rand.

[RightWhale]

expenditures are projected at $77.2 billion

What is California's projected budget deficit this year? Maybe Russia could bail them out, although Communists are defilitely not in favor in Russia anymore..

[lideric]

Amazing. The Ruskies are taking our conservative ideas (flat tax of 13%) and using them and it works. Too bad our cowardly GOP politicos won't fight for a flat tax here.

[Isle of sanity in CA]

national defense spending at $11 billion, or 14.9 percent of overall spending

They even seem to have their spending priorities in order. I wonder if they accept immigrants from California?

[SevenofNine]

RACK Illya if he doing this actually two years ago Steve Forbes went to Russia talk business with then Prez Boris Yestlin he first met with then PM Vladimir Putin that whole story so I get the feeling maybe Vlad read Steve Forbes book

Rule 4 of smack chat universe don't unestimate KGB agent

[MarMema]

Count me in as a wannabe retiree. I love being in Russia.
The people are outstanding, and all the sights of Europe are just a day trip.

[Brett66]

If their economy keeps growing at the rate it's been, they could be a major economic force in 5 years. The euro-socialists might be envying these guys more than they do us in no time.I'm sure they'll be saying something like "sure they've got %2 unemployment compared to our %12, but we have all of these great government services, they're just capitalist barbarians."

[Stavka2]

Why do you think the EU is so desperate to get Russia in...so they can strip here of the gas and oil and she gets nothing in return but 50% taxes...they know they can't handle another competitor on the Eastern Economic front too...not good fur the Euro Weenies.