OREANDA-NEWS. December 29, 2008. Vice PM and Finance Minister Alexei Kudrin expects the budget deficit to reach RUB 1.5-2.5 tn in 2009. According to Kudrin's forecast, the budget will be short of revenue precisely for this amount and it "should be compensated from the Reserve Fund". In addition, he specified that the year 2009 will be the most difficult for the Russian and global economy. "This will be the worst year for the global economy after the war" – he said in a televised interview Saturday. The Finance Minister noted that inflation in Russia will remain high, above 13%. According to him, "devaluation will cause additional inflation", i.e. the inflation rate will climb.

The devaluation effect has gradually started to make itself felt, i.e. the weakening of the ruble, it has occurred as early as this year, now more than RUB29/USD and once it stood at RUB24/USD. Now we project it to be RUB 31-32/ USD ", the Finance Minister said. "This means that devaluation will give a shot in the arm to inflation. All imported goods will become more expensive. Inflation in Russia is on the rise. It will drop in the USA, but rise in Russia. Needless to say, interest rates cannot be lower than inflation, otherwise banks will operate at a loss, go bankrupt and cease to issue loans for the economy at all", the Vice PM said. Alexei Kudrin assured that financial problems cannot be resolved by social spending and the interests of those dependent on the budget will not be affected. "We will slightly reallocate expenses but will not lower them. This will not affect either salaries or pensions. 100% of these budget expenses will be executed. State employees have nothing to worry about, neither servicemen, nor doctors, nor teachers. The regions will also have sufficient funds for social payments" – he stressed. The expenses for the 2014 Olympic Games and construction of Olympic facilities will also remain untouched. Kudrin said that the Winter Olympic Games should be held. "We will be able to finance the Olympic Games and we do not see any dramatic decline in revenue that would prevent us from implementing this construction" – the Vice PM is confident.