Russia's lower house of parliament approved a tight federal budget for the next three years on Friday and gave its backing for new fiscal rules aimed at controlling spending. Divisions within President Vladimir Putin's government over fiscal strategy have raised questions about Russia's commitment to its tough fiscal plans.
The vote is a victory for the fiscally hawkish Finance Ministry, which backs tight deficit targets despite criticism from the Economy Ministry. The latter argues that higher government borrowing is needed to support investment and economic growth. The budget envisages a 2013 federal deficit of 0.8 percent of gross domestic product (GDP), which is forecast to fall to 0.2 percent of GDP in 2014 and a nearly balanced budget in 2015.
Russia's non-oil deficit looks set to remain high, however. In the end passage of the budget was largely a formality as pro-government deputies dominate the Duma, or lower house of parliament and only minor amendments were introduced before it was passed in its key second reading.