Presidential Advisor forecasts budget crisis

Non-interest expenses of the Russian budget may advance by 20 percent with a 5-percent growth in the GDP, Presidential Economic Advisor Andrey Illarionov forecasted at today's international conference devoted to the modernization of the Russian economy. He specified that this forecast was based on the data of the economic situation in Russia in the first quarter of 2003. In 2000 non-interest expenses were 33.8 percent of the GDP, in 2002 they were 36.5 percent and in 2003 they can surge to 39 percent of the GDP, he noted.

Illarionov stressed that this situation could lead to a very complicated budget crisis. "The reestablishment of the macroeconomic balance is impossible without a decrease in expenses. If it is delayed, there is a risk of another crisis similar to that in 1998", the Presidential Advisor added.