OREANDA-NEWS. July 21, 2011. “Our government receipts are growing not only because of high energy prices, but also because of growth in the economy. The positive trends can be seen in most sectors of the economy.”
Transcript of the beginning of the meeting:

Vladimir Putin: We will begin with the latest information. Mr Kudrin (Finance Minister Alexei Kudrin), will you please report on the budget performance? The main question is how much we have earned and how much we have spent.

Alexei Kudrin: In this case, I will only briefly speak about the amounts of revenues and expenditures.

Vladimir Putin: And also about how much we have stashed away. We now have a budget surplus, if memory serves, don’t we?

Alexei Kudrin: Government revenue for the first six months totalled 5.304 trillion roubles, or 51.5% of the adjusted revenue target. You probably remember that we adjusted this in June, during discussions of macroeconomic forecasts for the year.

Vladimir Putin: How much, did you say? Five trillion?

Alexei Kudrin: Yes, 5.304 trillion roubles. Expenditures in the reporting period were 4.664 trillion roubles, or 42.3% of the year-end figure after adjustments. The budget surplus is 640.2 billion roubles, or 2.7% of GDP. At that time last year, we had a budget deficit. But it should be remembered that we customarily have additional expenses at the end of the year, so we have confirmed our previous budget deficit forecast at about 1%, or slightly more than 1%. The year-end figure will depend on the fulfilment of expenditure obligations by the ministries and other government agencies.

The biggest unplanned revenues, an additional 93 billion roubles, have been transferred by the Central Bank. We expected it to transfer 60 billion, but the Central Bank’s actual transfers for the past year stood at 153 billion roubles. This equals 75% of the bank’s profit last year; the size of transfers is stipulated by law.

So, we are now working in compliance with our plan. In the reporting period, the ministries and other government agencies have made payments under contracts in the amount approximately 18% higher than they did last year.

At the same time, the limits for budget obligations and the ministries and other agencies’ budget breakdowns are being adjusted to the changes made to the budget in June. I am asking them to accelerate this work and to inform their subordinate offices about the revised limits added as amendments to the budget in June.

Vladimir Putin: Thank you. I fully agree with Mr Kudrin. Our government receipts are growing not only because of high energy prices, but also because of growth in the economy. The positive trends can be seen in most sectors of the economy. What are the results for the first six months?

Elvira Nabiullina (Economic Development Minister): I am prepared to speak on the main economic development indicators in the first half of the year. Reconstruction growth continues. Gross domestic product has grown 3.9% in the first six months, and 0.3% in June compared to May on a seasonally adjusted basis. The growth was 0.4% in May. Overall, we see stable, positive trends regarding GDP growth. It slowed to 3.7% in the second quarter from 4.1% in the first quarter, and the average figure for the first six months is 3.9%. In the second half of the year, we expect GDP to grow 4.5% due to several nascent economic trends. One of them concerns investment. In the past few months…

Vladimir Putin: Did you say [the GDP growth will be] about 3%?

Elvira Nabiullina: No, it will be about 4.5% in the second half of the year. The first positive factor underlying this is the growth in investment. Investment has been increasing at a higher rate in the past few months. It grew 0.8% in the first quarter and 4.9% in the second quarter, which is why we expect a higher year-end growth in investment. The reason for this is that state investment – federal and regional – which accounts for a major share [of total investment] is usually made in the second half of the year. Evidence of this investment growth is the accelerated pace of construction, which is a good trend.

Vladimir Putin: How much has the construction industry grown?

Elvira Nabiullina: The construction industry has entered a positive phase. It grew by seasonally adjusted 0.8% in June compared to May and 0.9% for January through June. Simply, the growth rate was unstable in…

Vladimir Putin: So, the construction industry has grown by about 0.9% overall?

Elvira Nabiullina: Yes, it was 0.9% for the whole of the construction industry in the first six months.