Russian budget spending has grown at an astounding pace

In December, the state will spend as much as in the entire first quarter

The government approved the execution of the federal budget for 9 months of 2022. The main conclusion: spending is growing, and expenses are accelerating, and incomes keep up with them with great difficulty. For the month remaining before the New Year, according to the head of the Ministry of Finance Anton Siluanov, 5.5 trillion rubles will have to be spent, which coincides with the volumes of the entire first quarter. Officials attribute the increase in spending to “an increase in payments as part of the state’s social obligations to citizens.” At the same time, the amount of spending under the item “national defense” remains classified.

Mikhail Mishustin said at a cabinet meeting that despite the challenges faced by the Russian economy, the main budget indicators for the first 9 months remain balanced. “Sanctions have not violated the stability of the Russian financial system and have not affected macroeconomic stability,” he stressed. Incomes for January-September, according to the prime minister, turned out to be better than expected: they grew by 10% compared to the same period last year and approached 20 trillion rubles. At the same time, expenses also increased – by 5.5%, to 19.5 trillion rubles. “According to the results of the reporting period, the federal budget was executed with a surplus of 0.2% of GDP, or more than 200 billion rubles,” said Anton Siluanov.

It should be noted that the announced figures are noticeably different from the preliminary estimates of the Ministry of Finance, published in October. Then the department admitted that revenues were almost equal to expenses. And from the surplus accumulated in the first quarter of 1.5 trillion rubles. by the fourth quarter, there were miserable “penny” – 54.7 billion rubles. But now it suddenly turned out that this amount is almost four times more. However, the upward trend in spending is in any case obvious: we recall that it was originally planned to execute the 2022 budget with a surplus of 1.3 trillion rubles. And according to the results of 9 months of 2021, the positive balance amounted to 1.6 trillion rubles, which is 8 times more than the current values.

Anton Siluanov warned that spending would accelerate even more in December. “Over the remaining month, we have to fulfill a significant amount of expenses – this is more than 5.5 trillion rubles,” he said. Thus, spending for one December will practically coincide with the entire first quarter, when 5.9 trillion rubles were spent. The Accounts Chamber in a recent report said that in October-December the government could spend 9.3 trillion rubles in total, and total annual spending would reach 29 trillion rubles, which is almost 6 trillion more than planned when the budget law was adopted. In this case, the surplus will turn into a deficit, like a carriage to a pumpkin: its volumes are estimated at 1.1-1.3 trillion rubles.

Siluanov at a meeting of the Cabinet of Ministers said that in order to fulfill budget assignments, it would be necessary to “make the necessary changes to the regulations.” “We are working with ministries and departments to adjust budget allocations, make the necessary changes to the schedule, to the limits of budget obligations,” he said. Translated from bureaucratic language into Russian, this means that some items of expenditure are being hastily cut, while others, on the contrary, are increasing. However, no specifics on this score will not appear. Since June, the Ministry of Finance has classified spending in areas, including the section “National Defense”, and in public speeches, members of the government in every way avoid mentioning spending on military defense. This time, speaking about the increase in spending, Mikhail Mishustin referred to “an increase in payments as part of the state’s social obligations to citizens.” Whether these obligations include payments to the mobilized and their families, and to what extent, is not specified.

As far as income is concerned, the situation is no longer as rosy as it looked some time ago. According to Siluanov, the growth was due to oil and gas revenues. “This is understandable: this year we were favored by the conjuncture of oil and gas prices, as well as a number of changes that we adopted in tax legislation,” he explained. The head of the Ministry of Finance estimated the growth in revenues from the sale of hydrocarbons at 37%, while in the last reporting period the increase was estimated at 58%. At the same time, non-oil and gas revenues continue to decline. “This is primarily due to a change in import supplies and the tax base,” Siluanov said without going into details, specifying that the decrease was about 4%. Experts, in turn, note that if calculated as a percentage of GDP, then budget revenues for January-September 2022 will be 0.6% lower than the same period last year. “The dynamics of income is slowing down, and the growth in income from the sale of oil and gas no longer compensates for the fall in oil and gas revenues,” they note.

Published in the newspaper “Moskovsky Komsomolets” No. 28922 dated November 30, 2022

Newspaper headline:
December spending: 5.5 trillion rubles