We walk on not the last - Newspaper Kommersant No. 174 (7375) of 09/21/2022

We walk on not the last - Newspaper Kommersant No. 174 (7375) of 09/21/2022



The government has announced the main parameters of budget revenues and expenditures for 2023-2025. Despite the conservative rhetoric, a decision was made to widen the 2023 budget deficit to the level of this, tax the excess profits of 2022 from commodity exporters and increase government borrowing to save the NWF. The return of budgetary rules to the budget, apparently, will look nominal for the time being: income figures indicate that the budget is based on fairly realistic estimates of income from commodity exports, and the question of how to replenish the NWF for the coming years is considered irrelevant.

Prime Minister Mikhail Mishustin opened the meeting of the budget commission of the government with a message that the draft budget for 2023-2025 had been submitted to the President of the Russian Federation the day before, it was approved, the purpose of the meeting is to make decisions on the last “forks” in the budget structure so that on Thursday and the budget itself, and the budgets of now two social funds (social and medical), the budget forecast and the "Basic Directions of the Budget, Tax and Customs Tariff Policy" could be approved at a government meeting. The base figures - revenues, spending and the budget deficit - released by the prime minister, in general, there is enough information to assess what happened to the budget projections over the summer.

The original basic budget structure in the version of the Ministry of Finance (see "Kommersant" dated June 21) assumed a deficit of 1.1% of GDP in 2023, 0.9% of GDP in 2024 and 0.8% of GDP in 2025; government borrowings. In August, the budget planning commission faced applications from departments for additional funding of about 5 trillion rubles. in 2023, that is, bringing next year's expenses above 31 trillion rubles. and a very large expansion of the budget deficit, financed primarily by the NWF.

The same figures at the beginning of the commission meeting on September 20 looked like this.

The budget deficit in 2023 should be approximately the same as in the current year 2022, about 2% of GDP, or about 3 trillion rubles. For 2024, the deficit against June indicators was maintained at the level of 0.8% of GDP, however, changes in the forecast allow for an increase in spending by 1.6 trillion rubles.

The 2025 deficit is announced at 0.7% of GDP, which is 0.1 percentage points lower than the June projections, and, apparently, not radically higher than the old plans. However, according to Kommersant, part of the new expenses for 2025 was approved conditionally. It is not yet known what exactly has been changed in the forecast prepared by the Ministry of Economy. Based on the above figures, it can be assumed that part of the compromise between the supporters of fiscal conservatism and fiscal stimulus was the reduction of the forecast oil price to the former “cut-off price” - to put it simply, the budget construction does not imply that at current oil and gas prices it will be necessary to decide whether to spend or convert “surpluses” of such revenues, at least in 2023-2024: purchases of yuan in the NWF in the equivalent of tens of billions of dollars do not fit into the project, what is expected to be received from exports will be spent.

Note that this strategy implicitly assumes that the White House does not expect a large-scale global economic crisis, which would inevitably bring down world oil prices - and with them the budget revenues of the Russian Federation. However, it does not imply the effectiveness of the EU and US oil and gas embargo on the budget, as well as an effective price cup on oil and gas supplies from the Russian Federation - it is likely that the budget documents will implement the principle (discussed earlier as the basis of the modified budget rules), according to which such restrictions will not affect the revenues of the federal budget of the Russian Federation, since the reduction in supplies and the increase in prices for Russian exports will be equivalent in terms of financial results.

Confirmed (see "Kommersant" dated September 20) information about the increase in taxation of primary industries - the oil and gas sector and part of the chemical industry. Despite the obvious costs of such a decision (companies are unlikely to be able to expand investment programs in the coming years to change export routes), it is predictable and similar to the idea of ​​a windfall tax on the income of energy companies in 2022 in the EU: sharply increased oil prices provoke an increase in tax redistribution.

Federal revenues for 2023 in the project are ultimately designated at the level of 26 trillion rubles.

It should be noted that, if desired, next year's budget could well be fully balanced, and given the government's very solid carry-over balances for 2021–2022, de facto a strong surplus. Nevertheless, if the Ministry of Finance insisted on the immediate start of partial budget consolidation, the idea to postpone it for a year won out: spending in 2023 should be at the level of 2022, as well as the federal budget deficit. The Ministry of Finance wins in maintaining the NWF: Mikhail Mishustin confidently stated that the White House's strategy is to finance budget deficits through the growth of government borrowing and the preservation of the NWF. It does not follow from this that the fund will be an exclusively passive element of the budgetary system in the near future, but it is mainly supposed to be preserved, rather than spent.

Thus, there is more fiscal stimulus in the budget for at least 2023 than fiscal conservatism, and this is the main result of the budget bargaining in recent weeks. More detailed figures of budget forecasts will provide more grounds for understanding what economic processes are laid down in the idea of ​​the next three-year budget period. For the time being, it is reasonable to assume that the White House now estimates the magnitude and duration of the drop in net private demand to be higher than in June 2022 (with a more moderate estimate of the GDP decline in 2022), and considers additional fiscal stimulus next to replace this fall in a relatively safe way for inflation. Recall that the Central Bank has already announced its future response to this government decision. Apparently, a doubling of the budget deficit in 2023 will mean higher key rates and loan rates: budget abundance is not free.

Dmitry Butrin



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