Kudrin Eyes $14Bln for Wage Hikes

The government may use 343 billion rubles ($14.1 billion) in extra 2008 revenues and savings to raise pensions and public sector wages, Finance Minister Alexei Kudrin was quoted as telling a Cabinet meeting on Monday.

The country's economy grew faster than expected in 2007, with gross domestic product expansion set to reach 7.6 percent instead of 6.5 percent used in the initial budget calculations.

The Economic Development and Trade Ministry had also upped the 2008 GDP growth forecast to 6.6 percent from 6.4 percent due to higher oil prices and accelerated industrial growth.

Kudrin was quoted by Russian news agencies as saying the government planned to amend the 2008 budget, raising projected revenues by 324.9 billion rubles. The 2008 federal budget revenues are currently seen at 6.64 trillion rubles.

Kudrin added that the government had also saved on its external debt servicing in 2007 due to the weak dollar and appreciating ruble, enabling it to raise the amount further to 343 billion rubles.

The announced figure is higher than the 270 billion rubles assigned for pension and wage hikes Kudrin had quoted in December. The Finance Ministry was not immediately available to clarify the difference.

Kudrin vowed that the oil and gas revenues, seen at 2.38 trillion rubles in 2008, would not be touched, minimizing inflationary pressure in the economy.

President Vladimir Putin called this month for higher pensions and said social issues should set the tone for the government's economic policy in the next few years.

Putin will step down after a presidential election in March but said he would stay on as prime minister if his preferred successor, Dmitry Medvedev, currently first deputy prime minister, wins the poll.

The average monthly pension was 3,292 rubles ($136) in October 2007, according to Health and Social Development Ministry data, while the minimum subsistence level was set by the government at 3,809 rubles.