(Recasts after Putin comments)
By Darya Korsunskaya
MOSCOW, Sept 9 Russia's finance ministry wants
to cut defence spending over 2017-19 by 6 percent from this
year's level, a government source told Reuters on Friday, but
President Vladimir Putin said it was important to stick to what
had been agreed earlier.
Differences on defence expenditure are part of an ongoing
battle over Russian spending priorities as weak oil prices and
Western sanctions over the Ukraine conflict hurt the economy and
spur a budget deficit.
The finance ministry wants to reduce defence expenditures as
part of a broader 6 percent cut to government spending, the
government source said.
The proposed spending cuts would not affect the salaries of
state sector employees or payments to the population such as
pensions, the government source said, adding the proposals were
still under discussion and could change.
The finance ministry has come up against strong opposition
from the defence ministry and security services when it has
sought to cut outlays on defence in the past.
Putin told a cabinet meeting on Friday: "All budget
responsibilities and plans which we took on earlier in the
sphere of defence and security of the government should be,
without question, fulfilled."
"The continuity of the current and new programme should be
ensured," the Russian leader said, referring to a current state
rearmament programme and another planned over 2018-2025.
The finance ministry wants to limit the budget deficit to
3.2 percent of gross domestic product this year, before cutting
the deficit by 1 percentage point annually.
It is aiming to keep annual state spending at 15.79 trillion
roubles ($245.94 billion) over the 2017-2019 period.
The government source told Reuters the ministry is also
proposing extending a freeze in pay increases for state
employees for another three years.
The pay freeze was introduced at the start of this year and
was to have run for one year, although the salaries of public
sector professions such as teaching and healthcare were
With annual inflation running at 6.9 percent in August, the
pay freeze entails significant declines in real wages for
certain state employees.
($1 = 64.1900 roubles)
(Writing by Alexander Winning and Lidia Kelly; Editing by
Christian Lowe and Jon Boyle)