BOFIT Weekly Review 2016/09
Russia approves 2016 anti-crisis economic programme
Over its several weeks of planning, the anti-crisis programme has seen its price tag repeatedly reduced as Russia’s fiscal outlook faltered. Funding decisions were made for only some measures of the approved plan, though the sources are still partly unclear. The fate of other measures (including support for the troubled VEB state development bank) will depend on economic trends in the first half of this year.
The total value of the package amounts to just under 700 billion rubles (€8 billion). However, most of the measures inked in the programme are already included in this year’s federal budget. The additional funding needs are put at 160 billion rubles. This corresponds to 0.2 % of GDP, so the impact on the economy is likely to be limited. It is also still unclear where the additional funding will come from.
Some 60 % of the total 700-billion-ruble package will go to regions and social spending, a bit more than a third will go to supporting industry and rest to help small and medium-sized enterprises (about half in the form of government guarantees). Over 70 % of the 160-billion-ruble additional funding is marked for industry, with the remainder going to regions and social spending. Carmakers are the big winners; they are set to receive support worth 140 billion rubles.
The programme also includes a long list of structural reforms. These cover a broad spectrum of various measures like regulatory reforms and improved oversight of state firms.