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Russian Group Submits Draft Budget

June 5, 2001

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MOSCOW (AP) _ The Finance Ministry submitted its draft budget for 2002 to the Russian Cabinet on Tuesday, counting on a budget surplus windfall from high oil and natural gas prices for the third year running.

The budget draft, to be discussed Thursday by the Russian Cabinet, set spending at 1.51 trillion rubles ($52.17 billion) and revenues at 1.642 trillion rubles ($56.62 billion), Finance Minister Alexei Kudrin said in a statement.

The surplus smounts to 1.3 percent of Russia’s estimated 10.26 trillion ruble ($354 billion) gross domestic product.

The budget figures are based on the Finance Ministry’s prediction of an average price of $22 per barrel for Urals crude, the Russian benchmark oil price. Last year, the price averaged $27 a barrel _ bringing Russia an unforeseen budget surplus, its first ever.

As in previous years, interest and debt repayments make up the biggest single item in the 2002 draft budget, at 289.8 billion rubles ($9.99 billion).

The budget is based on an average ruble exchange rate of 31.50 rubles to the dollar, weaker than the 29.50 rubles to the dollar at the base of this year’s budget, and a predicted inflation rate of 12 percent to 13 percent next year _ about half the current annual rate of 24 percent. The government has previously been unable to tame inflation.

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