Russian News From Russia: March 20th, 2009!

RBC News Source: March 17th, 2009!

Russia to slash spending on gov’t staff: The administration of Russia will be cut by RUB 38.7bn (approx. USD 1.14bn), or 22 percent, Russian Finance Minister Alexei Kudrin told a briefing following a cabinet meeting on Thursday where amendments to the federal budget for 2009 were under discussion. The figure includes all expenses connected with public management, Kudrin explained. He stressed that the cuts would not affect the court system, however, which would be funded in full.

Budget revenue to shrink in Russia: According to revised data, Russia’s budget revenue will drop 27.6 percent in 2009 compared to 2008, Deputy Prime Minister and Finance Minister Alexei Kudrin told a press conference following a cabinet meeting on Thursday. In 2008, Russia’s budget revenue stood at some RUB 9.258 trillion (approx. USD 273.7bn), while budget surplus amounted to roughly RUB 1.697 trillion (approx. USD 50.2bn). The amendments to the federal budget for 2009 have yet to be refined, Kudrin said, adding that they were purely technical amendments with no particular significance. He also explained that subsidies earmarked for various Russian regions might be reallocated in a number of areas, and the government would determine the possible ways to use its budget reserves.

Russian retail sales slide in February: Retail sales decreased 2.4 percent to RUB 1.05 trillion (approx. USD 30.51bn) in February 2009 compared to the same month a year earlier, the Federal State Statistics Service (Rosstat) reported. In the first two months of 2009, however, retail sales inched up 0.3 percent to just shy of RUB 2.129 trillion (approx. USD 61.85bn) against January-February 2008. Enterprises and individual entrepreneurs operating out of fixed premises accounted for 86.4 percent of total retail sales, while retail markets and fares represented 13.6 percent. Food products, including beverages and tobacco, made up 48.5 percent of total retail sales, while non-food items accounted for 51.5 percent (against 46.7 and 53.3 percent, respectively, in February 2008).

Russia’s unemployment rate creeping up menacingly: Russia’s total number of unemployed jumped 20.6 percent in February 2009 year-on-year, to over 6.4 million people (8.5 percent of the economically active population), the Federal State Statistics Service said today. This also shows a 4.9-percent increase from January 2009.

Putin slams money printing as inefficient : Russia’s Prime Minister Vladimir Putin finds printing more money an inexpedient and even dangerous way to cover the budget deficit amid the economic turmoil. Budget deficits are in store for Russia not only this year, but for a few more years afterwards, he stressed at today’s government meeting. This, in the PM’s opinion, confers even greater responsibility on the government and calls for a conservative budget strategy, as well as maintaining confidence in the national financial system. The budget deficit, therefore, must be tackled in a civilized manner, with the help of globally accepted means – that is, from reserves stashed away during the previous year or, if necessary, through loans obtained on market terms.