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. Last Updated: 07/27/2016

Budget Passes 3rd Reading

The State Duma on Friday rubberstamped a proposal to hike budget spending by 28 percent in 2007 in a third and penultimate reading.

The budget proposal won 341 votes, with 77 against. It will come into force following a fourth and final reading by the Duma on Nov. 24 and approval by the Federation Council and President Vladimir Putin.

The budget forecasts 2007 GDP at 31.22 trillion rubles ($1.17 trillion) and consumer price growth of 6.5 percent to 8 percent. The bulk of the increase in spending, which comes on top of a 40 percent rise in 2006, will go toward higher state salaries, army wages and pensions and may prove popular with millions of Russians living in poverty across the country.

Total spending will rise to 5.46 trillion rubles ($203.1 billion) from 4.27 trillion rubles in 2006. But with 6.97 trillion rubles expected in revenues, the budget will still have a surplus of 4.8 percent of GDP.

Economists warn the budget is vulnerable to oil price fluctuations since it is based on an aggressive estimate of $61 a barrel of Urals crude.

Finance Minister Alexei Kudrin, the cabinet's leading fiscal hawk, criticized the budget as bloated by excess spending plans in the run-up to Duma elections in late 2007 and presidential elections in early 2008.