Gov't official comments on expenses on servicing foreign debts in 2003

Expenses on paying off and servicing the state's foreign debts in 2003 willbe larger, than the figure envisaged in the 2003 budget draft, SergeyKolotukhin, a representative of the Russian government, declared at today'senlarged session of the State Duma budget subcommittee and commission onservicing state debt. The reason for this difference is due to the factthat main parameters of the budget draft were calculated in accordance withoptimistic variants of economic forecasts. The difficulty in calculatingthese expenses is that 40 percent of foreign debts are nominated in othercurrencies, including Euro, Kolotukhin specified. The current Euro rate hasalready exceeded the rate, which was expected by the government. Moreover,the calculations envisaged low interest rates. However at present, there isinformation that the Federal Reserve System plans to increase these rates,the official added. Currently, according to the budget draft, about $6.4bnare to be allocated for paying off foreign debts.Sergey Shokhin, a representative of the Audit Chamber, confirmed the mainparameters of expenses on servicing and paying off foreign debts. However,he admitted that many budget parameters had already become old. He stressedthat the 2003 budget would be difficult due to complicated debt policy.As it was reported earlier, the first reading of the federal budget draftfor 2003 is scheduled for September 26. .

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