The government has drawn up a draft budget for 2024 with a deficit of 1.6 trillion rubles

Preparation of the draft federal budget for 2024 and the planning period 2025 and 2026. in government is almost complete. After final consideration, the document will be sent to parliament, Russian Prime Minister Mikhail Mishustin said at a government meeting on September 22.

According to the Prime Minister, work on the budget “was carried out against the backdrop of increasing global imbalances.” “External pressure on the country’s economy continues. Thanks to the implementation of the president’s instructions and flexible changes in the regulatory framework, the government, in coordination with the Central Bank, managed to mitigate many challenges,” the Prime Minister noted.

According to the materials for the draft budget (available from Vedomosti), federal treasury revenues in 2024 will amount to 35 trillion rubles. (19.4% of GDP), expenses – 36.6 trillion rubles. (20.4% of GDP). According to the Cabinet of Ministers, non-oil and gas revenues will be twice as high as oil and gas revenues. RUB 36.6 trillion – this is the maximum projected amount of spending in 2024: Mishustin explained it by a significant increase in funding for measures to implement the President’s message to the Federal Assembly.

Thus, the budget for next year is drawn up with a deficit of 1.6 trillion rubles. Mishustin noted that the government “tried to minimize the budget deficit as much as possible.” It will be covered primarily through borrowing, he added.

In 2025, federal budget revenues are planned at 33.5 billion rubles. (17.6% of GDP), in 2026 it is expected that they will grow to 34.1 trillion rubles. (16.8% of GDP), expenses will amount to 34.4 trillion (18.0% of GDP) and 35.6 trillion rubles. (17.6% of GDP) respectively. From these data it follows that the budget for 2025 was formed with a deficit of 900 billion rubles, and in 2026 it will increase to 1.5 trillion rubles.

The efforts of the Cabinet, as Mishustin announced, “will be focused on effectively solving the six priority tasks” set by the president. These are: expanding foreign economic interaction with promising partners from friendly countries and improving the mechanisms necessary for this; strengthening technological and financial sovereignty; advanced construction of transport, utilities and social infrastructure; improving the welfare of citizens; ensuring national conservation; protection of motherhood and childhood, support for families.

The current budget forecasts a deeper treasury deficit for 2024 – 2.2 trillion rubles. (1.4% of GDP), in 2025 – 1.3 trillion rubles. (0.7% of GDP). Thus, the government has planned to reduce the budget deficit compared to last year’s forecasts.

According to the current budget for 2023-2025, the deficit in 2023 will be 2.9 trillion rubles. (2% of GDP). In July, Finance Minister Anton Siluanov, in an interview with the Argumenty i Fakty newspaper, said that the budget deficit at the end of the year could amount to 2–2.5% of GDP. At the same time, already in early September, Russian Prime Minister Mikhail Mishustin noted that a steady course towards positive changes allows us to count on the execution of the federal budget this year with a deficit at the level of the initial forecast of 2% of GDP.

Expenses for the implementation of the President’s message will be increased from 2.1 trillion rubles. this year up to 2.5 trillion rubles. in 2024 and 2025, and 2.6 trillion rubles. – in 2026. The government plans to spend 2.8 trillion rubles to finance national projects next year. In 2023, 2.86 trillion was allocated for these purposes.

Among the main areas of financing the new budget are the state’s social obligations, defense spending, as well as the integration of new regions and support for the country’s technological development and infrastructure expansion, the materials say.

760 billion rubles. planned to be spent over three years on initiatives in the field of socio-economic development, Mishustin said at a government meeting. We are talking about social support for the most vulnerable categories of citizens, strengthening Russia’s defense capability, integration of new regions, etc., the prime minister specified. The government will allocate a grant of more than 5 billion rubles to the Defenders of the Fatherland Foundation, created on the initiative of the president.

The Cabinet plans to spend 4.4 trillion rubles over the next three years to pay a single benefit. Projected expenditures on maternity capital will amount to 1.6 trillion rubles, on programs to improve housing provision for families with children – 482 billion rubles, another 100 billion rubles. planned to support low-income citizens. The government also included expenses of 1 trillion rubles. for the provision of medicines to certain categories of citizens. Another 111 billion rubles. will be spent on creating new places in general education organizations.

Among the main expenses in the economic and industrial spheres are support for civil enterprises (more than 947 billion rubles over the next three years), a program to support small and medium-sized businesses (67 billion rubles over three years).

When preparing the draft of the new three-year budget, the government relied on the basic scenario for forecasting socio-economic development, which assumes maintaining annual economic growth rates above 2%.

On September 12, the Ministry of Economic Development introduced an updated forecast for 2024-2026. to the government. The base scenario assumes GDP growth in 2023 by 2.8% (forecast improved from 1.2%), and in 2024–2026. by 2.2–2.3%, an increase in investments by 6% at the end of the current year and by 2.3–3% in the next three-year period. Inflation will decrease from 7.5% in 2023 to 4.5% in 2024, the ministry predicts. At the same time, the exchange rate, according to the Ministry of Energy, will remain weak in 2024 – about 90 rubles. per dollar with an average oil price of $85 per barrel.

According to preliminary data from the Ministry of Finance on budget execution for January–August 2023, revenue amounted to 16.9 trillion rubles, which is 3.5% lower than the same figure for the same period in 2022. Oil and gas revenue decreased by 38% year-on-year year to 4.8 billion rubles. At the same time, the dynamics of non-oil and gas revenues significantly exceeded those planned by the budget (+ 24.2% compared to the same period in 2022), the department noted.

The Ministry of Finance emphasized that the execution of federal budget expenditures remains at a normal level after a sharp increase at the beginning of the year. According to the department’s preliminary estimate, the volume of budget expenditures for 8 months of 2023 amounted to 19.35 trillion rubles, which is 12% higher than the same figure in 2022.