​TRANSNISTRIAN GOVERNMENT REQUESTS US$130 MILLION FROM RUSSIA

The Transnistrian Government requested from Russia a long-term loan of US$130 million for paying off the budget deficit, as well as methodological and expert assistance in conducting reforms in budget and tax sector, said region’s finance minister Irina Molokanova, summing up the results of last-week’s visit to Moscow.

According to the region’s finance ministry website, the Transnistrian delegation reported about the main socio-economic indexes and the situation in economy at the meeting with the Russian Government. In particular, they focused on the problem of the budget deficit, uncovered with a source of financing.

In general, Transnistria’s consolidated budget and social fund expenditures account for 57.5% of the GDP, while 10% of GDP is the uncovered budget deficit worth US$130 million.

The tax burden on business accounts for 35% of the GDP. With all this, the number of people employed in economy is 106.7 people per 100 pensioners. Out of 134.4 thousand working people, 48% account for the budget sphere.

“The raising of budget revenuers at the expense of tax burden raising is impossible, as high taxes may lead to suspension in economic agents’ activities. The decline in expenditures will negatively affect people’s incomes as the budget has a social direction and the biggest part of its expenditures accounts for social needs”, the minister said.

At Moscow meeting the Russian Government decided that will consider the demand about loan. For taking the final decision, a set of analytical activities should be conducted for studying the budget legislation of the region.

Infotag’s dossier: The Transnistrian economy is for already the third year facing crisis. The region’s authorities are not paying for the Russian gas, directing the money collected from consumers to budget replenishment. The draft 2017 budget has not been adopted yet, because expenditures in it, even on socially protected items, are 700 million rubles (US$62 million) higher than revenues and there are no funds to cover the deficit.