Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

State Mulls Plan to Meet IMF Terms

The Russian government met in a closed session Thursday to put the finishing touches on a three-year economic plan aimed at complying with an International Monetary Fund agreement at the center of a $10.2 billion loan.


Officials could not confirm whether a formal agreement between the government and Central Bank was attained, but the ultimate plan is expected to largely mirror points reached last month with the IMF.


"In essence, this is not an agreement with the IMF, but a joint statement by the cabinet and the Central Bank," Sergei Vasilyev, deputy economics minister, told a news conference Thursday. "This document is a purely domestic product."


Russian officials have said the IMF board of directors is expected to meet Wednesday to discuss the preliminary agreement. Approval, anticipated by mid-April, would clear the way for the first tranches of money, expected to be between $3 billion and $3.5 billion for 1996.


Following the IMF agreement, the government's economic plan will be the elimination of export tariffs April 1, with the exception of oil tariffs, which will be halved to 10 European currency units ($8) and dropped altogether July 1.


To compensate for lost federal revenue, an additional charge of 3.8 rubles per ton/kilometer will be added to the current pipeline transit tariff of 16 rubles per ton/kilometer, Vasilyev said in an interview with The Moscow Times.


Russia will also formally agree not raise its average level of import duties, currently at 13 percent, and keep all tariffs at or below 30 percent, said Richard Layard, an expert with the Russian-European Center for Economic Policy, which also advises the government.


"Of course, we still have to see after July how much of [the program] is carried out," Layard said, referring to the outcome of the presidential election in June, where the Communists are rated as strong contenders.


The program will aim for an annual inflation rate of 25 percent for 1996, Economics Minister Yevgeny Yasin told Interfax. February saw a record-low level of monthly inflation at 2.8 percent, according to the State Statistics Committee.


The government will also stop the registration of export contracts and set up a regulatory body to manage so-called natural monopolies, Vasilyev said.


Tax collection stayed low at only 7.9 percent of the gross domestic product for January and February, and expenditure was subsequently maintained at a low 9.4 percent of GDP, Layard said.