In January, the Russian budget deficit amounted to 0.2% of GDP

The start of execution of the federal budget in 2024, in contrast to 2023, turned out to be balanced – without sharp jumps in income and expenses. The deficit in January, as reported by the Ministry of Finance on Wednesday, amounted to 308 billion rubles, or 0.2% of GDP compared to last year’s 1%. Revenues from the low base of last January immediately increased by 77% and amounted to 2.4 trillion rubles, which, however, corresponds to the monthly average of last year. Expenses, on the contrary, on an abnormally high basis at the beginning of 2023, decreased by 13% and amounted to 2.7 trillion rubles, which is also the average monthly level of last year.

The budget deficit in January was 308 billion rubles, or 0.2% of GDP, reported Ministry of Finance. The January deficit relative to GDP is five times lower than last year. Let us recall that a year ago, analysts were frightened by the dramatic start of budget execution with its huge deficit of 1.65 trillion rubles, or 1% of GDP. The Ministry of Finance then explained this by generous advances of budget recipients’ expenses and advanced government procurement. Then, let us remind you, the situation stabilized, and the deficit at the end of 2023 met the target, amounting to 1.9% of GDP (see “Kommersant” for January 12).

In 2024, according to the current budget law, the deficit should be halved, to 0.9% of GDP. At the same time, the authorities already at the planning stage planned for a noticeable increase in both income and expenses for the year of the presidential elections. Relative to the updated total for 2023, revenues in 2024 should increase by 20% (to 35.1 trillion rubles), and expenses by 13% (to 36.7 trillion rubles). After such a pumping of money into the economy, the Ministry of Finance for 2025, as part of the normalization of budget policy, envisages a reduction in both parts of the budget.

The spending structure in 2024 reflects new priorities: military appropriations will be increased by 1.7 times compared to 2023 and will reach 25% of all spending.

So far, in January, revenues, based on a relatively low base at the beginning of last year, immediately increased by 77%, to 2.396 trillion rubles. Non-oil and gas revenues from this amount amounted to 1.721 trillion rubles. (plus 85%; the Ministry of Finance clarifies that the reason for such a strong increase was, among other things, the receipt of “non-tax revenues of a one-time nature,” including payments from auctions to secure quotas for the extraction of aquatic biological resources). Oil and gas revenues increased by 59% compared to last January, to 675 billion rubles. This, however, is only slightly more than it was in December 2023 (651 billion rubles), and lower (due to a decrease in oil production and exports) than the base level of these incomes planned for the month (see “Monitoring” in “Kommersant” dated February 6).

Budget expenditures in January amounted to 2.704 trillion rubles—against the backdrop of more restrained advances than a year ago, they decreased by 13%. Let us note that both income and expenses in January were exactly at the level of the average monthly indicators of the previous year. That is, the start of budget execution in 2024, unlike 2023, turned out to be smooth – without sharp jumps in revenues and expenses.

Vadim Visloguzov