WHILE ZHUKOV TALKS ECONOMIC GROWTH, NEMTSOV TALKS DEEPENING RECESSION.

Prime Minister Yevgeny Primakov met yesterday with his deputies, including Yuri Maslyukov, the first deputy premier in charge of economic policy. They discussed, among other things, the second vote for the government’s draft federal budget for 1999, which is expected to take place soon. In late December, the State Duma approved the budget’s first reading after Primakov threatened to resign if the draft were rejected (see the Monitor, December 24). Vladimir Ryzhkov, the Duma’s first vice speaker, predicted yesterday that the budget will be passed in its final form no later than February 10 (Russian agencies, January 4).

Aleksandr Zhukov, who heads the Duma’s budget committee, was strangely upbeat yesterday about the prospects for Russia’s economy this year. He predicted that the country’s recession will end by the first half of the year, and be followed by “a small economic growth” which will reach 2 percent by year’s end (Russian agencies, January 4). Should Zhukov’s prediction come true, it would mean the single largest upward move in Russia’s gross domestic product since the fall of the Soviet Union. According to official statistics, Russia’s GDP, after years in a free-fall, entered the black only in 1997, when it grew by 0.8 percent. Some have questioned even this modest figure, given that the leadership of the State Statistics Committee, which compiles such figures, was subsequently jailed for corruption: The charges included doctoring statistics in return for kickbacks. Regardless of such doubts, the Russian government has itself predicted a 3 percent drop in the GDP this year, while the International Monetary Fund (IMF) projects one of 8.3 percent.

Many observers say the government’s 1999 budget is unreal, given that it is based on an annual inflation rate of around 30 percent, an exchange rate of a bit more than 21 rubles to the dollar and on Russia receiving billion of dollars in Western financial aid. Inflation is already running at around 10 percent a month, the dollar already costs around 21 rubles and the likelihood of Russia receiving large-scale aid is small. Indeed, Pavel Bunich, head of the Duma’s committee on property and privatization, said yesterday that only “pathological optimists” were still hoping for Western credits. Bunich said printing money is the only means the government has to cover the budget deficit, and predicted that this year’s inflation rate would be around 56 percent (RTR television, January 4). An IMF delegation is expected to arrive in Moscow for talks on January 17.

Meanwhile, former Deputy Prime Minister Boris Nemtsov wrote in an article published today that Russia’s economic crisis would deepen this year. Nemtsov predicted that industrial production will fall by 5-10 percent in 1999 and that inflation will reach 90 percent by year’s end. Nemtsov called the government’s hopes of receiving foreign credits “laughable” (Moskovsky komsomolets, January 5).

WARSAW GRANTS STANKEVICH POLITICAL REFUGEE STATUS.