Russian Government Agency: State-owned companies have to reduce operating expenses by 10 percent
The Federal Agency for State Property Management, Rosimushchestvo, is being required to reduce their operating expenses by at least 10%. They only have one month to develop the plans and schedules to accomplish it.
The Federal Agency for State Property Management Rosimushchestvo has demanded that Russian state-owned companies reduce their operating expenses by at least 10%. Expense reduction plans have to be developed in one month, as reported by Vedomosti on Monday, August 8, 2016.
According to the newspaper, the directive of the Federal Agency has already been received by JSC Russian Railways, JSC Transneft, PJSC Alrosa and PAO Rosseti. The representatives of Rosneft, VTB and Aeroflot also reported about the pending expense reduction. According to the directive, the state-owned companies will be required to report on the expense reduction to the Board of the Directors and the Federal Ministry of Industry once a quarter. Prior to this, state-owned companies were looking at an expense reduction of 2% - 3%.
The question of whether companies will comply with the directive has not been discussed, a representative of the Ministry of Economic Development told Vedomosti. According to him, the measures are needed for the “optimization of the Federal Budget."
In 2015 the Russian government cut Federal Expenditures by 10% and is now trying to distribute the burden of fiscal consolidation for the whole state-sector due to high inflation, experts say.
Earlier it was reported that the recession in Russia, which has lasted for six quarters, slowed in the 2nd quarter of 2016. At the same time, the reduction in real incomes has accelerated this spring. 78% of families are forced to conserve. Nevertheless, the beginning of the growth of the Russian GDP is not excluded.