Russia: Postponed Reforms, Poky Tax Receipts

Put on your rose-colored glasses. It's budget time in Russia. Parliament will soon begin debate on a 1998 budget that unrealistically expects $62 billion in revenues. The plan is almost sure to pass, even though similarly fantastic forecasts have forced huge spending cuts in the past two years (chart). Moreover, borrowing-cost targets will have to be revised up, since the Central Bank of Russia hiked interest rates sharply on Nov. 10 in order to defend the ruble.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.