Page 62 - RusRPTNov19

6.0 Public Sector 6.1 Budget
Key parameters: draft federal budget for 2020-22
Units
2018
2019 (current law)
2020F
2021F
2022F
Revenues
RUB bn
19,454.40
20,174.90
20,363.00
21,246.50
22,058.30
Revenues
% GDP
18.7
18.5
18
17.7
17.2
Expenditure
RUB bn
16,713.00
18,293.70
19 ,82.1
20,632.00
21,770.70
Expenditure
% GDP
16.1
16.8
17.3
17.1
16.9
Balance
RUB bn
2741.4
1,881.20
880.8
614.5
287.6
Balance
% GDP
2.6
1.7
0.8
0.5
0.2
Source: MinFin, VTB Capital Research.
Federal budget: surplus allocation and debt financing
RUB bn
2019 (current law)
2020F
2021F
2022F
Total
-1881.2
-880.8
-614.5
-287.6
% GDP
1.7
0.8
0.5
0.2
including:
Debt
1409.7
1599.5
1718.5
1874.5
NWF
4.7
4.5
4.3
4.1
Other
-3295.7
-2484.9
-2337.4
-2166.1
Source: MinFin, VTB Capital Research.
Russia has released a draft budget for 2020-21 to the State Duma at the state of October.
• Budget balance projections are in line with the prior guidance: +0.8% GDP for 2020, +0.5% GDP for 2021 and +0.2% GDP for 2022
• The draft does not provide more details on the plans for allocating excess oil and gas revenues after the NWF's liquid assets exceed 7% GDP
Judging from the Ministry of Finance's comments, the accumulation of NWF liquidity is set to continue after the 7% GDP threshold.
For example, MinFin’s Fiscal Policy Guidelines suggest that, to withstand a moderate terms of trade shock (which would be oil prices declining to $25-30/bbl for three to five years), requires using the equivalent of 5-14% GDP for NWF funds. The fact that that the current 7% GDP cut off is closer to the
62 RUSSIA Country Report November 2019 www.intellinews.o