The federal budget closed with a surplus in October

In October, the federal budget closed with a surplus for the third month in a row – and the deficit accumulated over ten months decreased to 0.7% of GDP, or 1.235 trillion rubles. Some improvement in the balance (at the end of nine months, the deficit was equal to 1% of GDP) was largely ensured by the October growth in oil and gas revenues (see Kommersant Online, November 3).

Let us recall that the reason for the doubling of oil and gas revenues was the quarterly payment of additional income tax (ATI) by oil workers and the lack of payments to them for the fuel damper (note that yesterday the government introduced amendments to the Tax Code to the State Duma, returning the damper in full from October). As a result, the backlog of oil and gas revenues (RUB 7.21 trillion in January-October) from last year’s schedule continued to decrease: at the end of nine months it was 34.5%, and for ten months it was 26.3%.

In January-October, non-oil and gas revenues were collected into the budget of 15.9 trillion rubles. This is an increase of 28.7% compared to last year. The growth was driven by VAT, whose collections from the restoration of business activity in previous months provided more than half (59%) of all non-oil and gas revenues—RUB 9.34 trillion. (we are talking about all revenues from this tax – “domestic” and “imported”). The growth rate of VAT collections by the same period in 2022 is 22.3%. Income tax did not grow as significantly – by 13.9% (1.567 trillion rubles based on the results of January-October).

In total, all federal budget revenues for ten months amounted to 23.11 trillion rubles. (see chart). Due to a serious decline in oil and gas revenues in the first half of the year, this is only 4.4% higher than the level of the same period in 2022. Income growth thus, even against the background of a strong weakening of the ruble, still lags behind inflation, the level of which as of October 30, according to the Ministry of Economy, was equal to 6.69%.

Budget expenditures for ten months are 24.34 trillion rubles, plus 11.7% compared to the same period in 2022. Their abnormally high growth at the beginning of the year, which the Ministry of Finance explained by generous advances and advanced government procurement, has dried up: according to the results of the first quarter, expenses were higher than last year by 34%, for the first half of the year – by 19.5%, and for three quarters – by 9.7%. Now the department notes the preservation of the “normal level” of expenditure dynamics – since the beginning of the second quarter, year-on-year they have grown by only 4.1%.

Vadim Visloguzov