Russia govt to approve economic development forecast for 2010-2012

MOSCOW, July 13 (Itar-Tass) -- The Russian government presidium will
discuss the scenario conditions of Russian socio-economic development in
2010-2012 here on Monday. Under these conditions a 3-year federal budget
will be drafted for this period of time. As compared with the previous
forecasts the Cabinet forecasts a higher economic development rate. The
GDP growth is planned at one percent (earlier 0.1% was forecast), 2.8%
(1.5%) in 2011 and four percent (3.2%) in 2012, a source in the government
told Itar-Tass on Sunday.
These figures are primarily linked with higher tariffs on railway
shipments that will go up 9.4% (initially planned five percent) on the
cargo traffic and ten percent up in the regulated sector of the passenger
traffic since 2010, the source said. This trend will make higher financial
reserves of not only the Russian Railways Company, but also in all other
industries. The foresaid changes in economic growth forecasts is also
connected with other changes, particularly "more accurate evaluation of
the investment program in the electric power industry," he added.
The government also intends to increase a forecast on the development
of the industrial production. "The industrial production growth is now
forecast as positive and will amount to about one percent in 2010," the
source said (earlier a 0.3% fall in the industrial production was forecast
in 2010. The growth of tariffs in other sectors of natural monopolies
remains unchanged - 15% up on gas supplies and five percent on electric
power supplies. Meanwhile, the source believes the Ministry of Economic
Development will most likely draft additional measures for the accelerated
development of the country. "Our current forecasts of economic development
do not satisfy anybody, as we will reach the 2008 development level only
in 2012, but earlier we were planning to lay down a substantial basis for
the accelerated innovation development by this year," he said. "Therefore,
the Ministry of Economic Development will probably draft new measures,"
the source said.
The government forecasts the inflation rate at ten percent in 2010,
7-8% in 2011 and the growth of consumer prices may reach 5-7% in 2012. The
source also noted that the government envisages 200 billion roubles as a
reserve for new anti-crisis measures. "These monetary funds are already
not so big, as it is this year, as some funds have already been spent for
implementing new social support measures, the assistance to regions,
subsidies and other decisions," the source said. Meanwhile, he emphasized
that "the general policy of the government in 2010 is to formulate
forecasts, draft a budget and the maximum protection of two priorities -
the social sector, pension policy, where the previously declared
principles will be kept, as well as the expenditures in such high-tech
spheres, in which we witness our competitive advantages - space, nuclear
power engineering, information technologies, communications, aviation and
electronics."
The current forecast envisages a budget deficit in 2010 at 6.5% of
GDP. The source expressed confidence that the budget deficit will go down
in the next few years. "Our task is to reduce the budget deficit
drastically to 2-3% that is a quite safe level," he said. However, the
source recalled that the average budget deficit amounts to about eight
percent in developed countries. "This shows that the problem is pressing,"
he added. The government source reminded that the development scenario is
based on the oil price of 55 dollars per barrel in 2010, 56 dollars per
barrel in 2011 and 57 dollars per barrel in 2012.