Economist Belyaev named the articles of the Russian budget that may be cut

The problems with the budget deficit, which covered the federal treasury this year, will not go anywhere next. The government approved the proposal of the Ministry of Finance on the frontal reduction of the state budget by 10% from 2024. According to preliminary estimates, this will provide savings in the range of 450 billion rubles.

Actually, such a decision of the authorities suggested itself. Since the beginning of the year, expenditures in the country have noticeably exceeded revenues. If, following the results of five months, the budget deficit amounted to 3.41 trillion rubles, then it then decreased a little. But it still remains huge – 2.6 trillion.

And when, as they say, the debit does not converge with the credit, we always resort to sequestration. The measure is well known to the Russians, tested more than once or twice by different compositions of governments. The last time they resorted to it was during the coronavirus pandemic, when the economy had to be completely shut down for a while.

True, the current “frontal” reduction, fortunately, will not occur on the entire budget “front”. According to the assurances of the head of the Ministry of Finance Anton Silaunov, the defense budget items and social spending – the payment of pensions, salaries to state employees, benefits will remain untouched. They are not in danger.

Siluanov suggested that the departments moderate their appetites and determine for themselves what to leave as a priority, and what can be relatively painlessly abandoned.

It is noted that even at the level of discussion in the government, first of all, those budget items that are not financially justified should fall under sequestration. But what kind of projects these are, only a narrow circle of dedicated financiers knows. So, what industries or individual programs can be cut? And how will this measure affect the country’s economy as a whole?

– Most likely, those who traditionally, since Soviet times, are considered not the main ones, will most likely be “cut off,” says financial analyst, candidate of economic sciences Mikhail Belyaev. – I believe that the first candidates could be ecology, non-priority scientific research, education and culture. Sports and health care can also be included in the “black list”.

– How is the cut in spending reflected in the pace of economic development?

– Expenses are not so much expenses from the budget, but the fulfillment of the state order for the economy. When they are reduced, the state, on the one hand, consumes less resources and uses less production capacity, which is good for savings, but on the other hand, this reduces employment and GDP. In the short term, with such a balancing of the budget, the state gets the effect. However, it loses strategically. The exchange rate of the national currency is declining, inflation is growing.

Let’s say a million rubles is needed to implement a program. If 900 thousand are allocated, this does not mean that the project will be completed by 90%. It won’t be done at all. These very 10% often become critical to the implementation of the intended task.

– How, in your opinion, can GDP be reduced?

– With our rather low growth rates, it can reach the level of statistical error – that is, it can be measured in tenths of a percent or even go into a small minus. This option cannot be ruled out.

What do we have now? The Central Bank is likely to raise the key rate to 8% in the coming days, which, of course, leads to a slowdown in the economy. Plus, a 10 percent frontal cut in spending is a step in the same direction. Excessive profits for business will be subject to increased taxes retroactively, which also does not contribute to the advancement of our economy. In a word, a whole package of measures hindering development looms on the horizon.

– Does the government have alternatives: is it possible not to resort to budget sequestration?

– In my opinion, it is necessary to increase the domestic public debt. We are proud that it is 15% of our GDP. Almost the least in the world. However, there is nothing to be proud of here. The bar for admission of countries to the European Union is 60% – this is considered a safe level of domestic debt.

If you borrow funds and use them to develop the economy, then in the end you get more advantages. It is possible to issue different types of government securities – for ordinary Russians, for wealthy citizens, for large corporations. With different denominations, yield percentages and maturities. This money should be channeled through the budget into the economy, into the development of enterprises.

Today, businesses often complain about difficulties in obtaining a loan due to the lack of collateral. With government bonds, you will be given a loan without any problems, and taking into account the yield of securities, it also turns out to be preferential.