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Oil Windfall Allows Moscow to Use Surplus on Social Programs (Russian TV News)


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Moscow planned its budget around a $42 barrel; rising oil prices mean Russia is now flush with cash. The government expects 3% growth and will focus expenditures on the wellbeing of its people: social programs, raising birthrates, raising the minimum wage.

Transcript:

The swing in oil prices due to the events in Saudi Arabia has already affected Russia's budget. According to Dmitry Medvedev, despite crude oil prices being pretty high now, the main financial document was composed based on the expectation that a barrel would cost $42. Today, the government approved the main aspects of the document.

How much will we earn and where will we spend it? Olga Meshcheryakova will tell us.

The social focus is what all the aspects of the country's main financial document are based on for the next three years. We will see, just like this year, a budget surplus, so revenues will exceed expenses. There will be something to spend.

National projects and modernization will require seven trillion rubles ($110 billion). Regional support will require 7.5 trillion rubles ($117 billion). Infrastructure, a comfortable and safe environment - almost 1.5 trillion rubles ($23 billion) more. Plans for housing development will cost 400 billion rubles ($6 billion).

Dmitry Medvedev: “When we prepared the budget, we judged by the fact that it should surely be socially focused. It's the most important direction. So money allocated for social support, the development of education, health service, and culture, is still the budget's main expense item. The budget should also be aimed at reaching national goals of development, set by the Presidential Decree.”

There are many goals, all of them important, but there are top-priority ones. Demographics and health service - a national project worth almost three trillion rubles. This money will be used for building hospitals, polyclinics, and paramedic-obstetrician units throughout the country. They will be set with high-end medical equipment. Specialists will be supported with housing and decent salaries. A separate line in the budget is maternity capital. It will rise. Next year, it will be 466,000 rubles ($7,300). The minimum wage will rise as well.

The government acknowledges that the budget is arranged in conditions of foreign economic unrest. Oil prices - that's nearly half of revenues - can barely be predicted, but the swing in barrel prices is compensated for by the budget rule - excess profit is sent to the piggy bank.

Dmitry Medvedev: “We understand that there can be any events. The global oil market is now taking a hit due to what happened in Saudi Arabia. That's why, despite the pretty high energy supply prices, we've fixed a cut-off price on a level of $42.4 per barrel for the Urals oil brand in 2020. The excess profit will be collected in the national welfare foundation. In addition, we will include clear guidelines in the budget for the national debt and inflation. We expect that during the next three years, inflation won't exceed the target value of 4%.”

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The budget period of three years is estimated to end with a powerful economic leap of more than 3%.


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