Slow Growth Could Delay Russia Military Spending

Russia may postpone for two or three years its planned weapons purchases

From Alexander Kolyandr, Wall Street Journal:  Russia could postpone its ambitious military spending program as an economic slowdown forces the government to review its spending plans, the country’s finance minister indicated Wednesday.

Speaking to reporters as he presented new weaker budgetary figures for the years to come, Anton Siluanov said, "Together with the Defense Ministry we have to look into the possibility of postponing a part of the (arms) spending."

He said the purchase of weapons may be postponed for two or three years, but only if the Defense Ministry agreed to the proposal. . . .

The economy ministry last month cut its 2013 growth forecast from 3.6% to a more moderate rate of 2.4%, which was approved by the government last week. Based on this outlook, the Finance Ministry expects the budget deficit in 2014 to widen to 0.6% of gross domestic product from an earlier estimate of 0.2%. For 2015, the deficit is expected to widen to 0.7% of the GDP from an earlier figure of 0.01%.

The minister also said the country’s Reserve Fund, which accumulates revenue from oil and gas, won’t reach 5% of GDP in 2014 and 7% by 2017, as planned. Some of the oil revenue will be used to finance budget spending amid lower revenue from taxes and privatization.  (photo: Yuri Kadobnov/AFP/Getty)

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