Russia to spare defence spending as most 2015 outlays cut by 10pc
MOSCOW: Russia will raise budget spending on social support and agriculture and exempt this year's defense outlays from reductions as part of a 2.3 trillion ($35 billion) stimulus program that will see most other expenditures cut by 10 percent in 2015.
Spending will decline by at least 5 percent annually in real terms for three years, with authorities seeking a balanced budget by 2017 "based on the most likely price level for the main export goods," according to the plan published on the government's website Wednesday and dated Jan. 27. The ministries of finance and economy were instructed to prepare a proposal by the end of this month on creating a bad bank that will be used to acquire "problem" assets.
"A gradual stabilization on global markets for raw materials and measures taken together with the central bank will allow for the normalization of the situation on the currency market and create the conditions for a significant reduction of nominal interest rates and improved credit access," the government said. Spending will decline by at least 5 percent annually in real terms for three years, with authorities seeking a balanced budget by 2017 "based on the most likely price level for the main export goods," according to the plan published on the government's website Wednesday and dated Jan. 27. The ministries of finance and economy were instructed to prepare a proposal by the end of this month on creating a bad bank that will be used to acquire "problem" assets.
But it has struggled to adapt its technology for smartphones and tablets, a market dominated by Qualcomm Inc, Samsung Electronics Co Ltd and Nvidia Corp. PC makers are struggling to stop a decline in sales as consumers hold off on buying new laptops in favor of more nimble mobile gadgets. Microsoft's long-awaited launch of Windows 8 in October brought touchscreen features to laptops but failed to spark a resurgence in sales that Intel and many PC manufacturers had hoped for. The world's biggest energy exporter is on the brink of a recession after oil prices fell to the lowest since 2009 and the U.S. and its allies imposed sanctions over President Vladimir Putin's actions in Ukraine. Russia is in an "extremely difficult" economic situation and faces a worse crisis than in 2008-2009, First Deputy Prime Minister Igor Shuvalov said last week. Vnesheconombank, the state development lender known as VEB, may get as much as 300 billion rubles from the National Wellbeing Fund. Bank recapitalizations from the fund may reach 250 billion rubles under the plan. Shuvalov has said that as part of the government's actions to battle the slump, it will support key enterprises, small businesses and monitor consumer prices on sensitive items.