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. Last Updated: 07/27/2016

2009 Spending to Increase by $18Bln

APMedvedev meeting on Wednesday with members of his "Golden" list of potential recruits for top official posts.
President Dmitry Medvedev said Wednesday that spending will be increased by 650 billion rubles ($18 billion) this year under a revised budget as the government bolsters social programs and invests in local industry in a bid to spur growth.

"The most important thing now is for the state to fulfill its social obligations even as budget revenue declines," Medvedev said at a meeting with ministers on the economy.

The government will "activate" home construction, encourage the purchase of more Russian-made equipment and stimulate small and medium-sized businesses while bailing out floundering defense companies, Medvedev said.

A revised budget will be sent to the government by March 16 that envisions an 8 percent budget deficit, its first since the economic collapse of 1998, Finance Minister Alexei Kudrin said. Kudrin last week estimated the increase in 2009 spending at about $14 billion.

The new budget contains 300 billion rubles to recapitalize banks and 255 billion rubles for subordinated loans to banks, Kudrin told reporters after the meeting Wednesday.

Some 370 billion rubles will be spent on pensions, while 300 billion rubles will be given to the country's regions, which expect a 1 trillion ruble shortfall in their budgets this year, Kudrin said. A further 350 billion rubles will be granted to support leading industries, he said.

Russia is bracing for its first recession in 10 years as the global slowdown hobbles demand for its chief commodity exports and unemployment and wage cuts put an end to the consumer boom.