Page 54 - RusRPTDec19

6.1.1 ​Budget dynamics - results
Russia’s federal budget spending was up 22% y/y in October as government plays catch-up with spending on the national projects.
The government continued to ramp up budget expenditures in October in order to catch up with its annual plan. Its spending during the month was up 22% y/y.
As revenues were down 10% y/y due to lower oil prices and a slightly stronger ruble, October saw the first monthly deficit this year, to the tune of RUB15bn.
Still, since budget expenditures in 10m19 were up only 6.9% y/y to RUB13.6 trillion and revenues were up 5.5% to RUB16.7 trillion, there was a surplus of RUB3.1 trillion in the period – well over 3% of GDP.
Analysts expect the government to maintain a high pace of expenditure in November and December in order to catch up to its plan for the year.
“The government is unlikely to be able to spend all of the remaining RUB4.7 trillion in the budget in just two months. According to one government official, some of this money (around RUB300bn) will likely be spent next year. Since expenditures will remain high in November and December, the budget will remain in deficit in 4Q19, though the budget balance for 2019 should still show a surplus of some RUB2 trillion (1.9% of GDP),” Sberbank CIB said in a note.
“The higher budget expenditures in 4Q19 should be supportive for investment activity and the construction industry, providing a further boost to economic growth. We expect GDP growth to accelerate to close to 2% y/y in 4Q19, from the 1.7% y/y registered in 3Q19, bringing GDP growth in all of 2019 to 1.3%,” Sberbank added.
54​ RUSSIA Country Report​ December 2019 ​ ​www.intellinews.com