Funding cuts, tight monetary policy jeopardize projects in industry - Russian Duma committee
MOSCOW. May 22 (Interfax) - The State Duma's Industry and Trade Committee has warned that planned cuts to budget spending on government programs to develop industry in proposed amendments to the 2025 budget could postpone the achievement of targets, while the Central Bank's high key interest rate is reducing the competitiveness of Russian products.
The committee's opinion on the bill to amend the budget (No. 914318-8) was posted in the parliamentary database.
The committee recalled that funding will be slashed by 66.9 billion rubles for the federal project to develop industry and increase its competitiveness, and by 30 billion rubles for the Scientific and Technological Development of the Russian Federation program.
Cuts will include 35 billion rubles for the auto industry and transport engineering; 1.7 billion rubles for industrial robotics; and 25 billion rubles for production of innovative transport. There are plans to reduce funding by 9.6 billion rubles for manufacturing airplanes and helicopters, and 4.1 billion rubles for construction of vessels and equipment for offshore fields.
"The committee notes that the reduction of budget allocations prescribed by the draft federal law [...] could lead to the risk of deadlines for achieving targets being pushed to a later period," the document said.
The committee also said the cuts are taking place amid the Central Bank's tight monetary policy, with the key rate at 21%.
"This circumstance is causing a faster than anticipated slowdown of business activity in 2025, with cooling demand, both consumer and investment," the document said.
High interest rates are having the greatest negative impact on projects with a long production cycle, which also significantly reduces the competitiveness of Russian products, the committee said.
Nonetheless, despite a number of concerns, the committee recommended that the Duma pass the bill in the first reading. The Duma plans to consider the bill on May 28.
