Page 48 - RusRPTJan22

6.1.1 Budget dynamics - results
The federal budget surplus continued to expand in November, reaching RUB2.3tn YTD.
· 2021 is firmly on track to a surplus: we expect the federal budget balance to total RUB+(1.0-1.4) trillion, or +0.8-1.1% GDP.
· The fiscal impulse has been waning: in real y/y terms, it has been negative for three consecutive months.
· Spending is shifting from consumption to capital. The most recent federal budget appropriations saw a rise in the infrastructure spending plan for 2021 (the national economy, in particular) of +RUB0.24 trillion, funded by excess non-O&G proceeds (previously, additional non-O&G revenues tended to benefit social spending). The fiscal stance is turning disinflationary, also due to infrastructure spending being associated with a lesser fiscal multiplier, resulting in more subdued second-round effects.
· Revenues continued to beat the Ministry of Finance's September projections. Analysts expect the total proceeds for 2021 to reach RUB25.0tn vs. the RUB23.8tn outlined in the most recent fiscal
48 RUSSIA Country Report January 2022 www.intellinews.com