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6.1.1 Budget dynamics - results
MinFin reported a RUB0.96 trillion deficit for 1H20 and a RUB0.68 trillion deficit for June. Adjusting for revenues collected due to the Sberbank ownership transfer, the deficit in 1H20 would have increased to roughly RUB2tn.
Federal budget spending amounted to RUB10.05 trillion in 1H20, up +28% y/y (51% of budget execution for 2020). In June, in particular, budget expenses increased +48% y/y.
Budget expenditures have been mostly skewed towards social support measures: they benefited social policy measures (+31% y/y in 1H20, +103% y/y in June, 63% executed) and, apparently, health care (+110% y/y in 1H20, 61% executed).
The execution of expenses on national projects (RUB0.76 trillion in 1H20, out of RUB2.16 trillion for 2020, 35% executed) might indicate that investment-oriented national projects are currently not the key priority (compared with social support measures).
In 2020, budget expenditures could amount to RUB23 trillion (including roughly RUB1 trillion of funds not-disbursed in 2019), Deputy Minister of Finance Vladimir Kolychev told RBC.
The upper limit of the budget deficit is 5% of GDP, and MinFin could borrow up to RUB5 trillion gross in 2020: RUB1 trillion in 3Q20 and RUB2.3 trillion in 4Q20.
57 RUSSIA Country Report August 2020 www.intellinews.com
