MOSCOW (Reuters) - Prime Minister Dmitry Medvedev said on Saturday that Russia cannot ramp up spending and give it away in cheap credits to support economic growth.
An economic advisory group close to the Kremlin has called for the government to increase spending ahead of Russia's parliamentary elections in September to help the economy out of recession and support Russian businesses.
"In theory, it sounds great, but this may spell high inflation, well in excess of the projected 6 percent level for 2017," Medvedev said in the interview for the news show 'Vesti on Saturday' with Sergei Brilyov.
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Medvedev said that fiscal stability gives Russia an extra "safety margin" and loosing that margin would mean galloping inflation and problems in buying basic products.
"Therefore, it is impossible to mechanically top up the budget funding and start printing money, as our opponents and even some of our supporters sometimes suggest," Medvedev said. "This is dangerous."
Russia's Finance Ministry proposes freezing annual budget expenditures in 2017-2019 are frozen at their actual level in 2016, Finance Minister Anton Siluanov said on Friday, which would mean cutting spending once inflation is taken into account.
(Reporting by Jason Bush and Lidia Kelly; Writing by Lidia Kelly; Editing by Susan Fenton)