Budget expenditures will increase due to surplus profits

Gateway 2 Russia, Russia
Oct 12 2004

Russia’s federal budget surplus in 2004 will be R505.7bn, a source in
the Russian government told Ria-Novosti on the eve of the cabinet’s
sitting to discuss changes to the Law on the Federal Budget for 2004.

Initially, according to the budget for this year, a surplus of R83.4bn
was expected. “The Ministry of Finance has presented to the government
a budget forecast till the end of the year. It expects revenues to
increase by R531bn, and expenditure by R108.6bn,” the source said.

It said the increase in revenues is thanks to higher tax collection –
to the tune of R430bn – on mineral extraction, and thanks to revenues
from customs export duties.

Interest related expenditure will be down by R40.9bn, and non interest
related expenditure will go up by R149.6bn.

The source said that this means overall federal budget revenue by the
end of the year will be R3,273,8bn and overall expenditure, R2,768,1bn.

The Stabilization Fund is expected to receive R397.4bn by the end of
the year, the source said. This is R313.9bn more than envisaged by
the budget.

According to the source, the funding of the international cooperation
efforts has also increased. For example, Belarus is to receive a
credit of 175m dollars in order to finance part of the Russian gas
supplies and to balance out the trade. In addition, credit to Armenia
is to increase by 31m dollars.

In the sphere of agriculture, the current year expenditures
will be increased by R5bn. In the words of the source, this is a
contribution to the charter capital of Rosagrolizing for the purchase
of agricultural technology.

The healthcare section will be increased by R1.7bn. This sum will
cover the purchase of medical equipment.

Amendments to the budget also envisage an increase in investments. In
particular, R4.75bn will be spent on roads infrastructure projects,
while R11.9 bn will go to other capital investments, including the
reconstruction of facilities in Beslan.