Russian budget revenues in January-May fell by 19%

The federal budget deficit of Russia for January-May of this year amounted to 3.41 trillion rubles, which is 19% lower than the total revenue for the same period in 2022. About this reported at the Ministry of Finance of the Russian Federation.

“The volume of federal budget revenues in January-May 2023 amounted to 9.818 billion rubles, which is 19% lower than the volume of revenues for the same period in 2022,” the Ministry of Finance said in a statement.

The Ministry of Finance at the same time noted a steady positive trend in non-oil and gas revenues. Since the beginning of the year, such revenues amounted to more than 6.96 billion rubles. (increase by 9% y/y). “Dynamics of receipt of the largest non-oil and gas revenues of the federal budget <...> returned to normal after a temporary reduction in January, associated with the action of one-time factors (accelerated procedure for VAT refunds, refund of income tax overpayments) and entered a steadily positive area,” the press service explained.

Oil and gas revenues amounted to 2.85 billion rubles. (50% reduction). The Ministry of Finance attributed the fall to a high comparison base of last year, a decrease in natural gas exports and a decrease in Urals oil prices.

On June 5, the press service of the Ministry of Finance reported that the Russian budget received less in May about 30.6 billion rubles. oil and gas revenues. The agency previously predicted a shortfall of 8.1 billion rubles. oil and gas revenues last month. For June, the ministry gave a forecast in which the budget will receive less than 44 billion rubles.

The agency will also increase sales of foreign currency from June 7 under the budget rule to 3.6 billion rubles. per day – a total of about 74.6 billion rubles will be spent on the sale of foreign currency. In May, this amount of receipts amounted to 40.4 billion rubles. (growth for this month will be around 55%).

In early January, the Ministry of Finance and the Central Bank announced the resumption of foreign exchange interventions as part of the budget rule. The Central Bank, on behalf of the Finance Ministry, began selling yuan from the same month. There have been no sales of foreign currency under the budget rule since spring 2020.

According to the model in force at that time, the Central Bank began interventions after the oil price fell below the cut-off price. The regulatory basket for interventions consisted of 39.7% of the euro, 30.4% of the yuan, etc. – this is how the National Welfare Fund (NWF) was replenished. But due to sanctions, funds in euros, pounds and yen in accounts with the Central Bank were blocked in February 2022 and the fiscal rule was suspended.