Lower chamber of Russian Parliament adopted first reading of budget 2017

The lower chamber of the Russian Parliament adopted on first reading the draft budget for 2017 and the planning for period 2018-2019. The document was approved by 334 MPs, while 100 voted against. The draft must be approved at second reading – a key stage of any changes, and then a third reading before being sent to the upper house of parliament.

Russian President Vladimir Putin set the objective of maintaining finances under control, despite a sharp decline in commodity prices, which have important role in the country’s budget, accounting up to 50% in 2013-2014.

The project envisages a gradual reduction of the deficit to 3.2% of gross domestic product (GDP) next year, compared to a deficit of 3.7% this year. The planned deficit for 2018 is 2.2% and for 2019 is 1.2%.

The parameters are achievable at the cost of reducing expenses in virtually all sectors – from education to defense. This raises concerns among economists that austerity measures might put under question the next year’s economic recovery.

The MPs of nationalist and communist parties, who approved many of the projects proposed by the government, harshly criticized the document presented. The leader of Russian communists Gennady Zyuganov determine the budget as antisocial and believes that it will inevitably lead to a political crisis.

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