Russian Finance Ministry to consider budget's impact on monetary policy when drafting 2026-2028 budget - minister

ST. PETERSBURG. June 20 (Interfax) - Fiscal and monetary policies must be coordinated, and the Finance Ministry will closely monitor the budget impulse's effect on price indicators when planning the next three-year budget, Finance Minister Anton Siluanov said.

"We currently find ourselves in a situation of economic cooling, and most importantly, planned economic cooling. We anticipated this, understanding that previous overheating led to rising inflationary expectations and actual inflation, which we now see must be prevented. Therefore, through the Central Bank's monetary policy tools - primarily the interest rate - and through fiscal instruments, since they're interconnected, we are addressing this issue and reducing inflation. Inflation is declining - weekly inflation, monthly inflation. This indicates we're achieving our intended objectives," Siluanov said in an interview with the Rossiya-24 television channel.

The key question now is how the government and Finance Ministry should proceed, he said.

"We must carefully monitor budget parameters and ensure fiscal and monetary policies remain coordinated and interconnected, because any excessive fiscal loosening could constrain the Central Bank's ability to ease monetary policy. That's why we need exceptionally precise preparation of the next three-year budget," he said.

Adherence to fiscal rules governing the primary budget balance provides the foundation for the Central Bank to subsequently ease monetary policy and reduce interest rates, he said.

"Therefore, in drafting the budget, we'll pay particular attention to its impact on price indicators and the overall fiscal impulse's effect on monetary policy and the economy. Our current priority is meticulous three-year budget planning," he said.