Education blog

A government commission led by Prime Minister Vladimir Putin on Wednesday approved Russia’s three-year federal budget with a rising deficit.

The government has been unable to cut spending as it had planned before, Moscow’s Vedomosti business daily reported.

In 2011, state expenses will increase from 9.3 trillion rubles (about 307 billion U.S. dollars) as planned earlier to 10.4 trillion rubles (about 344 billion dollars).

In 2012, the deficit will rise from 9.7 trillion rubles (321 billion dollars) to 10.8 trillion (357 billion dollars). And in 2013, it will go up from 10.1 trillion rubles (334 billion dollars) to 11.8 trillion rubles (390 billion dollars), a source in the Finance Ministry said.

Spending will rise 1.7 percent of Russia’s gross domestic product (GDP) in 2011, the source specified.

At the same time, the budget income will grow due to oil price increases and a sale of state-owned stakes in the country’s 10 largest companies. Still, the extra income will not offset the extra spending.

The Finance Ministry forecast that the budget deficit will amount to 3.6 percent of GDP in 2011, and then decline to 3.1 percent of GDP in 2012 and to 2.9 percent of GDP in 2013.

The first year the deficit goes down to zero is 2015, Finance Minister Alexei Kudrin said.

Budget expenses are increasing due to more generous defense spending. The government also plans to put extra money into education, environmental protection and state debt servicing.