Russia has reached the bottom of its bitter economic slump and must now choose whether to boost reform to climb out of the quagmire or sink into stagnation, the Economics Ministry said in a report published Friday.


Excerpts from the report, prepared for a major economic meeting to be chaired by President Boris Yeltsin and Prime Minister Viktor Chernomyrdin on Saturday, were published by Rossiiskiye Vesti, a newspaper directed by Yeltsin's administration.


The meeting of top officials, economists and industrial managers will assess Russia's economic situation and outline plans for 1995.


"The year 1995 may become a turning point for (the development) of the Russian economy," the report said.


"The question is whether the slump will end in a dragging depression or the levers of economic acceleration will be activated to ensure better economic conditions in 1995 and lay the ground for further progress in 1996 and 1997."


The report, a tough assessment of the economic choices facing the government, came just weeks after a major cabinet shakeup, which brought in several conservative ministers and raised doubts about the future of reforms launched in 1992.


Yeltsin has since stressed he remains committed to a tough line in introducing a Western-style market economy in Russia after decades of communist central planning, and the report was long on criticism of old-style socialist practices.


"The government deems it impossible to adhere to the strategy based on supporting uncompetitive enterprises through subsidies, easy credits and protection against competition through high customs tariffs," it said.


"Recommendations to strengthen state interference in the economy, to broaden price control or create artificial demand for products through big state orders are equally unacceptable."


But Yeltsin may find it difficult to win support for his plans from powerful regional bosses, influential industrial managers and even some government officials, who insist that current reformist policies should be dramatically changed.


Yeltsin will also have to deal with widespread rumors of souring relations between him and Chernomyrdin. These have triggered speculation that the premier may be about to quit.


Both Yeltsin and Chernomyrdin have frequently denied these rumors, but the speculation refuses to die.


The government's tough 1995 budget provides for a deficit of 7.8 percent of gross domestic product -- an aim agreed on with the International Monetary Fund.


The Economics Ministry report backed this plan.


"The key idea is to adopt a tough 1995 budget that would reflect the real possibilities to mobilize incomes (and) reduce the deficit to some 8 percent of GDP," it said.