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. Last Updated: 07/27/2016

State Releases Tons of Funds As Year Ends

The Russian government is releasing trillions of rubles before the end of 1995 in a rush to meet spending targets in key areas such as defense, pensions and social programs, a top Finance Ministry official said Monday.

"Recently, the volume of spending has grown rather significantly," First Deputy Finance Minister Vladimir Petrov told a news conference.

The year-end largess will widen the deficit toward 4 percent of gross domestic product from 3.2 percent earlier this year, he said. The bulk of the money, however, will come from unexpectedly high tax collections, long-awaited privatization revenues and an extra loan tranche from the International Monetary Fund, Petrov said.

The spending comes on the eve of hotly contested parliamentary elections in which hard-line opposition parties are running strong. The IMF already has warned Russia publicly against straying from its tight-money program in the heat of the campaign. "We are not doing any payments by increasing the budget deficit," Petrov said.

The minister said the bulk of the money is going to bail out the State Pension Fund, which has been behind on benefit payments since the summer.

So far this fall, the government had to provide an extra 5.8 trillion rubles (about $1.3 billion), allowing the fund to get caught up by the end of last month, he said.

Further subsidies may be needed before the end of the year, he added. Commitments also have been made to the defense, law-enforcement, agriculture, education, and health sectors, he said.