PM: Russia needs no serious reforms, ‘16 budget adjustments

MOSCOW, Apr 19 (PRIME) -- The Russian economy needs structural reforms but any dramatic changes will take their toll on people and can prolong the crisis for years, Prime Minister Dmitry Medvedev said on Tuesday during a meeting with lawmakers, adding that despite worrying signals earlier this year, the 2016 budget does not need adjustments so far.

“Yes, the country needs deep structural reforms. The government is well aware of that. But it understands how it will reflect on the social sphere. Any forced changes could strengthen and prolong the crisis phenomena for several more years. We will not go for reforms which take a toll on people,” Medvedev said.

“We have managed to avoid the 2016 budget correction as well, despite this seemed unavoidable in the year’s beginning. We do not plan to introduce amendments to the budget in the spring session (of the parliament, lasting until July),” Medvedev said.

Authorities will not start printing more money though the economy lacks it because this measure will undermine the income of households, Medvedev said. On the other hand, a proposed return to Soviet-style state-controlled economy will hurt business. Nationalization of large companies is “effective only as a propaganda tool,” he said.

According to Medvedev, authorities will come back to 3-year budget planning after 2016. The government will try to keep the budget deficit at up to 2.4% of Russia’s gross domestic product (GDP), which is an “economically safe level.”

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