Pre-election promises may dangerously disbalance the budget ? experts of FBK Economic Club

Director of FBK Strategic Analysis Department, Igor Nikolaev noted that “pre-election economics is greatly the economics of promises”. However, according to him, from the point of view of economic conditions, it is hard to imagine how these promises can be fulfilled. It leaves impression that authorities start losing control over their own promises regarding expenses. However, Nikolaev emphasized, it is necessary to balance the budget. “In the first quarter this year, the budget was implemented with surplus because of stably high oil prices. However, what makes one feel anxious, not the current year, but 2012 and the years to follow. Considering delayed increase of budget deficit which will definitely take place when expenses are increased and oil prices are decreased, by 2014 it can make 7-8% of GDP”, the economist believes. He made a conclusion that populist increase of social liabilities before elections, including increasing salaries, pensions, scholarships, welfares ? is a kind of budget trap, since these liabilities cannot be decreased.
Chief economist of MK Analitica, Oleg Buklemishev and Director of Political and Military Institute, Alexander Sharavin spoke at the meeting.