Mishustin explained the high budget deficit by “leading funding”

Prime Minister Mikhail Mishustin said that the high level of the budget deficit at the beginning of 2023 is due to “advance financing”. According to him, the growth of “anticipatory advance payment” amounted to 52%. He also noted that the public debt of the Russian Federation is about 15%, which is lower than in “unfriendly countries” and in most developing countries.

“How do you now look at the deficit for the period of more than two months that have passed. We have a deficit, as many in the press write, of 3.3 trillion rubles: revenues – 3 trillion, expenses – 6.3 trillion – as of March 8 … What happened? The reason is simple. We discussed for a long time that the money should start working from January 1st. This is the so-called advanced financing. We moved part of the expenses to the beginning of the year, so that in the first place the conclusion of contracts did not stand. Do you know how much advance advancement growth? Plus 52%. <...> Therefore, the deficit will continue to gradually come into line with the parameters of the budget,” said Mr. Mishustin, speaking with a report on the activities of the government in the State Duma. So he answered the question of the deputy from the “United Russia” Viktor Seliverstov about whether the government will have to turn on the “printing press” in connection with the growth of the budget deficit. The speech is broadcast on the website of the lower house.

Mr Mishustin recalled that the budget for 2023 included a deficit of 2% of GDP. It will be covered by borrowing in the domestic market, and there is an opportunity to use the funds of the National Welfare Fund (NWF). The Prime Minister noted that the authorities treat the use of the NWF “very carefully.”

“We are in a fairly comfortable range of our debt. We have approximately a public debt at the level of 15% of GDP. No need to give figures, what is the public debt of unfriendly states? Even in most developing countries it is slightly above 60%. Therefore, in this sense, we feel confident,” Mikhail Mishustin added.

In January, revenues lagged behind expenses by 1.76 trillion rubles, in February – by 820 billion rubles. In general, in January-February, the deficit amounted to 2.581 trillion rubles. This is 88% of the plan for the whole year (2.925 trillion rubles). A year earlier, following the results of the first two months, a surplus of 415 billion rubles was recorded; federal budget revenues in January-February 2023 amounted to 3.16 trillion rubles, which is 25% lower than revenues for the first two months of 2022. Including oil and gas revenues fell by 46% year-on-year. At the end of 2022, the budget deficit amounted to 3.3 trillion rubles.

More details – in the material “Kommersant” “The deficit is growing, but at a slower pace”.

Leonid Uvarchev