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. Last Updated: 07/27/2016

Top Deputy Says Budget Unrealistic

A senior deputy warned the Russian government Monday it had little chance of passing the 1996 budget in its present form because its inflation forecasts were unrealistic.


"I doubt whether [the budget] can be accepted in the form proposed by the cabinet," Itar-Tass quoted Mikhail Zadornov, chairman of the State Duma's budget committee, as saying.


The present draft, submitted to the Duma at the end of August, assumes a monthly inflation rate of 1 to 1.2 percent in 1996, Zadornov told reporters.


But in its latest estimates, the Economics Ministry was now forecasting inflation at 5 percent a month, he said. There was no immediate confirmation of the report and recent comments from officials center on 1996 rates of 2 to 3 percent.


But Zadornov said deputies found 5 percent more realistic than the optimistic assumptions in the current budget draft.


Economics Ministry forecasts accompanying the original draft assumed a monthly inflation rate of less than 2 percent.


But in a more pessimistic scenario, which seemed more likely by the time the draft was handed over in August, monthly inflation was put at 3 percent.


Zadornov said deputies were also unhappy with proposals on funding expenditures on Chechnya, low social and defense spending, and a failure to adopt tax changes proposed by the Duma.


The draft 1996 budget proposes a deficit of 81.85 trillion rubles (about $18 billion), or 3.9 percent of gross domestic product, compared with a deficit of 73.18 trillion rubles for 1995, originally estimated at 4.9 percent of GDP.


The 1996 draft puts spending at 414.42 trillion rubles and revenues at 332.57 trillion.


But Zadornov said deputies were willing to work with the government to get a revised budget passed in the current session, which ends Dec. 8, before parliamentary elections on Dec. 17.