Russia can't raise state spending forever: Putin

Reuters News
Posted: Jun 13, 2013 5:23 AM
Russia can't raise state spending forever: Putin

MOSCOW (Reuters) - Russia cannot afford to keep raising state spending, President Vladimir Putin said on Thursday, but it must find the money to fulfill the social spending promises he made on his return to the Kremlin last year.

Putin, in an annual presentation of the government's three-year budget plan, said that "the possibility of constantly and quickly raising state spending has been exhausted."

The 60-year-old leader won a third presidential term last year with the help of aggressive pre-election spending hikes, but a slowing economy and falling prices for oil - Russia's main export earner - are now squeezing the public finances.

Putin has accused the government of being slow to implement a string of decrees he issued on taking office in May 2012 to hike public sector pay, social benefits and regional development programs. Three ministers have since lost their jobs.

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"It is necessary to optimize the budget's structure, to find reserves and to redirect them towards the strategic tasks spelt out in the decrees," Putin told senior officials.

"We should increase the share of spending on projects that have the greatest impact on economic growth and social development."

(Reporting by Darya Korsunskaya; Writing by Douglas Busvine; Editing by Steve Gutterman)