Putin signed the law on easing the budget rule for 2023-2024
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Russian President Vladimir Putin signed the federal law on softening the fiscal rule for 2023-2024 for higher budget expenditures. According to the document, it will be possible to allocate no more than 8 trillion rubles to finance expenses. oil and gas revenues for the period from 2023 to 2025. Then the figure will be indexed every year by 4%.
The explanatory note to the law says that this volume corresponds to moderately conservative estimates of external conditions with a stable exchange rate in the range of 65–75 rubles. for $1. This will ensure the stability of budget expenditures regardless of market volatility and minimize the impact of oil and gas rental income volatility on the economy.
The ceiling on Russian budget spending under the new fiscal rule is defined as the sum of non-oil and gas revenues, basic oil and gas revenues, public debt service spending, and quasi-fiscal operations.
Spending in 2023 and 2024 will be higher than this formula suggests, and the budget deficit will be 2% (2023) and 1.4% (2024) of GDP. Therefore, for this period, the law allows higher expenditures due to oil and gas rent and spending from the National Welfare Fund is allowed – no more than 2.9 trillion rubles. in 2023 and 1.6 trillion rubles. in 2024.
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