The Russian government presented a surprise with a budget deficit

Large-scale tasks demanded expenses

The government at the first meeting in 2023 gave a surprise. The budget deficit turned out to be higher than all expectations: expenditures exceeded revenues by 3.3 trillion rubles, or 2.3% of GDP. The head of the Cabinet of Ministers, Mikhail Mishustin, said that additional funds were spent on solving large-scale tasks, and the head of the Ministry of Finance, Anton Siluanov, spoke about the support of people, clarifying the fate of 1.7 out of 6 trillion rubles.

At the first meeting of the Cabinet of Ministers in 2023, the government summed up the results of the implementation of the federal budget for the past year. The solution of large-scale tasks, according to Mikhail Mishustin, required serious expenses. They exceeded 31 trillion rubles, while revenues amounted to almost 28 trillion. The size of the deficit was specified separately by Finance Minister Anton Siluanov: expenditures were higher than revenues by 3.35 trillion rubles, or 2.3% of GDP. It is unlikely that the announced figures shocked the officials themselves, but for many experts they turned out to be quite unexpected – after all, no later than at the end of December, the Ministry of Finance announced a deficit of 2.9 trillion rubles. (2% of GDP), and in September expected to stay within 1.3 trillion rubles. (Recall that in May last year there was a surplus of 1.5 trillion rubles in the budget, but the continuation of the CBO quickly ate up both this money and additional oil and gas revenues.) However, Anton Siluanov found how to sweeten the pill. If we take into account the funds that were compensated to state off-budget funds for deferrals on insurance premiums, and subtract them from the amount of expenses, then the trousers will turn into elegant shorts with a deft movement of the hand and the budget deficit will be less than 2%. “As we planned!” the minister summed up triumphantly.

Siluanov said that compared to the original plans, spending was increased by more than 6 trillion rubles, and this money “was primarily aimed at supporting people.” In particular, unscheduled indexation of pensions for non-working pensioners, an increase in the subsistence minimum and the minimum wage cost the state 500 billion rubles. Financing a new payment for children from 8 to 16 years old – 400 billion rubles. Business support – 770 billion rubles. Where the remaining 4-plus trillion rubles went, the finance minister did not specify. However, the relevant conclusions can be drawn by looking at the 2023 budget: the government had to increase defense spending from the initial 3.5 trillion rubles. to almost 5 trillion rubles, and for security and law enforcement – from 3 trillion to 4.4 trillion rubles. It is obvious that similar trends were observed in the budget policy in 2022, just the Ministry of Finance places the accents differently.

Mikhail Mishustin rated the figures voiced by Siluanov as “not bad”. “Significant efforts have been made to ensure macroeconomic stability. And of course, such work should be continued this year in order to fulfill the planned budget obligations,” he said. The efforts that the prime minister mentioned include, among other things, the search for sources of financing to close the deficit. In 2022, the hole was patched at the expense of the NWF (recall that the State Duma allowed the Cabinet of Ministers to independently climb into the “box”), state borrowings (the Ministry of Finance carried out record placements on the market) and a one-time increase in the mineral extraction tax from Gazprom.

This year, the budget deficit is also projected at a level of at least 2% of GDP, and the sources of its financing remain the same. True, unlike last January, when oil flowed abroad, and its price fluctuated around $90 per barrel, the new year began with bad news. Export volumes fell sharply due to the imposed restrictions, and the price of Urals fell to $37 per barrel. Such rates not only do not allow replenishing the National Welfare Fund, but also jeopardize budget revenues, based on the assumption that oil will cost at least $70. In early December, there were 11.4 trillion rubles in the “box”. (moreover, only about 8 trillion of them are real money lying on accounts with the Central Bank). How long these funds will last if oil prices do not start to rise in the near future is a rhetorical question, which the government prefers not to even think about. However, the search for additional sources of income is already on the agenda: officials are looking towards coal miners, fertilizer producers and state-owned companies. The former, following the example of Gazprom, can make a one-time payment to the budget, while the latter can pay increased dividends to the state.

Published in the newspaper “Moskovsky Komsomolets” No. 28947 dated January 11, 2023

Newspaper headline:
Surprises of the first session