Page 70 - RusRPTJun21

6.0 Public Sector 6.1 Budget
MinFin reported the federal budget surplus for 3mo21 at RUB205bn,
surprising the Bloomberg consensus, which had expected a deficit of RUB340bn.
In March, revenues rose +33.1% y/y/RUB+632bn y/y, mostly on the back of the low base effect in oil prices as the RUBprice of oil gained 2x y/y, lifting oil and gas revenues +45.5% y/y / RUB613bn.
VTBC expects annual growth in O&G revenues to continue at double digit rates in April – in no small way due to the MET-ERT switch story. Meantime, non-oil and gas revenues were up slightly +3.4% y/y.
Base effects are everywhere in the data this year – and are especially dramatic for non-O&G revenues in April. We see this as likely to drag revenue growth lower due to the echo of last year's payments related to the Sberbank ownership transfer.
Spending side growth was, in general, in line with inflation, at +3.8% y/y. However, we note that March 2020 was a 10+% y/y spike in spending, which was then followed by a 30+% y/y growth in April, which represents a COVID-boosted spending base from which this year will be counted. VTBC believes the overall budget balance will likely continue to surprise on the stronger side in the forthcoming months.
70 RUSSIA Country Report June 2021 www.intellinews.com