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proposed by Putin should increase expenditures in cash form by RUB0.5 trillion this year. At the beginning of the year - before Covid-19 hit – analysts had seen expenditures at RUB19.7 trillion.
“Our estimates are very much preliminary and we will keep updating them as we get more information. Currently, in our base-case scenario we now expect a deficit of RUB3.7 trillion, or 3.5% of GDP. Financing the deficit should not require changes to the base oil price set in the budget (at $42.4/bbl Urals) or more use of the National Wealth Fund (allowed under the budget rule),” Sberbank CIB said in a note.
“The Finance Ministry has RUB1.1 trillion of unspent funds from previous years, while net borrowing could be expanded to RUB2.7 trillion from the RUB1.6 trillion initially planned. We believe this would be affordable, given the fact that foreigners are returning to the OFZ market. The government raised RUB0.7 trillion in the domestic market in January-May, so in June-December another RUB2 trillion should be placed, or RUB285bn on average every month,” Sberbank said.
6.1.1 ​Budget dynamics - results
The Ministry of Finance did not disclose data on the share of the budget deficit in the Russian economy in May which it has been publishing since 2005.
In April, the deficit fell by 27% in annual terms due to the coronacrisis. The press service of the Ministry of Finance did not comment on the termination of the publication of the deficit data. The last time the ministry skipped a report on deficit data was in February 2009, also a crisis year.
In May, the federal budget deficit amounted to RUB655.8bn, a 2.7-fold fall from the surplus of the previous four months of RUB246.7bn, according to data of
66​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com