MOSCOW—In his four years as prime minister, Vladimir Putin has
managed a feat many world leaders would envy—nearly doubling government
spending in ruble terms while leaving Russia's budget in the black. But
as he prepares to return to the presidency for a new six-year term, the
fiscal outlook isn't nearly so bright.
Though high prices for oil, Russia's main export, have kept the budget in surplus for the moment, an intense debate is under way inside the government on how to rein in spending and raise revenues. With presidential elections Sunday, that discussion has been kept quiet among promises of billions in new spending and benefits.
But hard choices will have to be made soon, according to officials and economists.
"We need a direction," Finance Minister Anton Siluanov told a government meeting this week. "The decision on how to move forward should be taken very soon, so that the new government has a precise plan."
He said the government is facing a tough choice between tax increases, which could hurt economic growth, or increased borrowing, which would suck up capital needed by the private sector. More Read
Though high prices for oil, Russia's main export, have kept the budget in surplus for the moment, an intense debate is under way inside the government on how to rein in spending and raise revenues. With presidential elections Sunday, that discussion has been kept quiet among promises of billions in new spending and benefits.
But hard choices will have to be made soon, according to officials and economists.
"We need a direction," Finance Minister Anton Siluanov told a government meeting this week. "The decision on how to move forward should be taken very soon, so that the new government has a precise plan."
He said the government is facing a tough choice between tax increases, which could hurt economic growth, or increased borrowing, which would suck up capital needed by the private sector. More Read
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