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Posted inEastern Europe & Russia, Russia

RUSSIA: Testing the Government’s Budgetary Resolve

RUSSIA’S BUDGET FOR fiscal year 1995 is a triumph for the government’s economic policy – at least on paper. Whether the government can adhere to the strict course stipulated in the budget of raising federal expenditures only slightly while boosting federal revenues remains to be seen. In his semiannual state of the economy address in mid-July, Prime Minister Viktor Chernomyrdin was cautiously upbeat about the government’s ability to implement the budget, which went into effect on 1 January. He noted what he called “significant progress” in stabilizing the country’s economy. Yet many opposition lawmakers – as well as the chairman of the State Duma Economic Committee – are pessimistic about the government’s chances of delivering on the promises made by the 1995 budget. They point to inflation that was two times higher than government predictions, uneven disbursement of government subsidies, and the financing of projects that were not originally included in the budget – mainly the war in Chechnya.