Budget 2012-2014: less and less room for manoeuvre — experts of FBK Economic Club

On November 15, 2011 a meeting of FBK Economic Club was held dedicated to “Whether there is life after elections: what tells us the budget 2012-2014”. The experts tried to estimate how the priorities implied in three-year budget shall affect the economic future of the country.

When opening the Club session, Director of FBK Strategic Analysis Department, Igor Nikolaev noted that «the budget for the nearest three years may be called military-oriented”. Expenses on military defense are increasing (from 13,9% in 2011 up to 18,8% in 2014) as well as national security expenses and law enforcement activities (from 11,3% in 2011 up to 14,2% in 2014). At the same time expenses associated with investments in human capital when reach their maximum on the threshold of elections will start sliding down afterwards. «So, the share of expenses on education when reaches 5,1% in 2011 is to plummet in 2014 down to 3,4% of all expenses of the federal budget. The same happens with healthcare expenses: maximum falls on 2011 — 4,6% while by 2014 their share will drop down to 3,2%», — Mr.Nikolaev quotes. However his main fears are caused by irreducible state liabilities with regard to increasing pensions, military serviceman allowance etc., as well as with regard to financing mega projects: Olympic games, world championships and ATEC summit. All that when the global economy, according to Mr.Nikolaev is “slowly approaching the double dip”. Finally the expert believes that “the 2012-2014 budget shows that the life will be hard”.