Russian PM: 2015 budget may be adjusted if economic conditions change

MOSCOW, Dec 10 (PRIME) -- Russia may adjust its 2015 budget depending on economic conditions, Prime Minister Dmitry Medvedev said in an interview with five Russian TV channels on Wednesday.

“If economic conditions change significantly, we will have to revise scenario conditions and finally, to make decisions concerning budget,” he said.

“We are not doing it yet,” he said, when asked whether such decisions are being taken at the moment.

Medvedev expects 2014 economic growth at 0.5% and inflation at over 9%.

He said that the central bank and the government must keep an eye on currency market speculations as the ruble is weakening, Medvedev said.

“It is an everyday occurrence, and if it occurs in an ordinary situation, it balances the financial system in fact. But when it occurs in conditions of a misbalance and various complicated expectations, of course, it influences peoples’ mood. And both the central bank and the government must oversee it,” he said.

The government and the central bank are negotiating with large exporters that they sell their foreign currency revenues evenly. Many large companies must service their debts and contracts in foreign currencies and have to retain foreign currency depriving the market of it, Medvedev said.

“In order to avoid this both the government and the central bank are negotiating with major companies to make them sell currency more rhythmically and evenly. It is common practice and we do this,” he said.

The prime minister believes the sanctions imposed by the E.U. and U.S. against Russia have created opportunities for the development of import substitution and domestic production. Russia’s self-sufficiency in pork amounts to 80–85%, while self-sufficiency in beef stands at 60–70%, he said.

Losses of the Russian economy from the E.U. and U.S. sanctions amount to several billion U.S. dollars, while E.U.s losses from the sanctions will stand at U.S. $40 billion in 2014 and $50 billion in 2015, Medvedev said.

Medvedev believes that the economy must eliminate its dependence on oil prices and promised that there will be no additional fees for small business after a fee on trade is introduced.

The prime minister also believes that a full-scale amnesty for off-shore companies, proposed by President Vladimir Putin, is not only a capital inflow factor, but will also improve the investment climate.

“We need the idea of money coming back, capital coming back not so much to receive as much money as possible, although it would be nice, but to create a normal investment climate,” he said.

Medvedev ordered the Russian Finance Ministry and the Economic Development Ministry to prepare proposals for an offshore money amnesty.

The government has not yet decided whether the amnesty will cover only money or also some other property, and this issue must stay under considerations, he said.

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