Page 55 - RusRPTJun19

6.0 Public Sector 6.1 Budget
Russia ended 2018 with a budget surplus of 2.7% -- the highest level in years -- and is on course to end 2019 with 1.9% surplus.
Russia's budget surplus is expected to contract in the next few years. In April, the projected budget revenue for the consolidated budget, federal, regional and municipal, and state social funds, is expected to grow by about 3% this year and around 4% per annum in 2020–2021, below inflation. The forecast goes back to 2036.
The revenue forecast is burdened by oil and gas taxes. After the soaring rise in 2018, they are expected to fall significantly this year and then fall below 10% this year. The estimate of their level is the same as last autumn, as well as the assumption of oil prices: over $63 for this year (Urals oil) and $58 for 2021.
The GDP growth forecast for 2019-2021 is unchanged, ie growth is expected to accelerate (1.3%, 2% and over 3%). Estimates of the level of consolidated revenues other than oil and gas taxes have risen slightly as they grew very rapidly last year and much better than expected (especially revenues from corporate income tax and VAT). They are expected to grow by 6–7% this year and by about 6% per annum in the years 2020−2021, as in the autumn forecast.
Consolidated budget expenditures increased slightly earlier in the year than anticipated in the autumn, and the estimate of the level of expenditure in 2019- 2021 has increased slightly. The growth rate of expenditure is estimated to remain at around 6% per annum, ie between 1.5% and 2% above inflation. The financing of the national projects set by President Putin in May 2018 is included in the budget.
The budget surplus is expected to decline this year to around 1.5% of GDP, and further to about 1% of GDP next year. The budget deficit under the budget rule (low oil price) is estimated to be around 1.5% of GDP in the coming years,
55 RUSSIA Country Report June 2019 www.intellinews.com