Financing national economy through credit and budget mechanisms

Abstract

This article examines the impact of budget policy on the development of Russian economy. It reveals a contradictory nature in strategic development goals of two sectors of the economy: the real and the financial one. Current money-and-credit policy of the Central Bank of the Russian Federation (CBRF) hardly takes into account the needs of internal market, it is accompanied by monetary contraction and by declining real disposable income. High interest rates restrain the potential of loans for upgrading production facilities and implementing structural changes in the economy. Since 2015, budget policy has mainly sought to adapt to structurally changing environments. Significant spread of shadow economy and offshore business do not allow increasing budget incomes of different levels and, thereby, providing necessary funding to support crucial aspects for economic development. On the basis of developed economies’ experience in achieving macroeconomic stability during crises, the article proposes credit and budget financing mechanisms aimed at developing current economy. Among these, monetary-industrial policy is considered an important mechanism for balanced growth of incomes and expenditures of budgets of different levels that makes it possible to efficiently support the development of the national economy.