The government had previously approved a three-year spending freeze at 15.78 trillion rubles ($249 billion) per year representing a decline in real terms amid continued economic uncertainty.
The freeze comes amid prolonged low commodity prices which have hit Russia's oil-exporting economy hard. International sanctions imposed on the country for its annexation of Crimea and role in a pro-Russian uprising in Ukraine in 2014 have not inspired investor confidence either, leading to a recession in Russia.
Earlier in July, Russia's Finance Minister Anton Siluanov suggested 5 percent budget cuts in 2017 as Russia's budget deficit was predicted to stand at 3.2 percent of gross domestic product (GDP) next year.
"Certain items to be consolidated are items unrelated to salaries, social payments, pensions, and are not first-priority expenditures. They total about a third of all budget expenses and are offered for consolidation at the rate of 5 percent in the next year," Siluanov said, TASS news agency reported.
The Finance Ministry will prepare budget parameters for expenditure cuts, he added
Russian Prime Minister Dmitry Medvedev prompted a social media storm recently after he told a Russian pensioner complaining of a meager pension that "there was no money left."
To read more on the story on The Moscow Times' website, click here.
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