Page 59 - RusRPTJun19

projects ordered in president Putin’s May 2018 inaugural Decree is included in spending estimates.
The budget surplus will shrink this year to about 1.5% of GDP and to 1% of GDP next year. The calculational budget deficit at the fiscal rule’s low oil price for the next few years is about 1.5% of GDP. The rule mechanism will replenish the National Welfare Fund so that its liquid assets exceed 10% of GDP in 2021 if no additional monies from the Fund are committed by e.g. granting loans for projects. This savings part of the rule forces the government to borrow to cover spending. The government debt will rise to 15.5% of GDP in 2021.
Russia’s finance ministry reports that public sector contracts made last year under procurement oversight were worth about RUB24 trillion (€320bn). Most of the contracts were made by public agencies or government- owned firms.
Federal, regional and local governments last year made procurement contracts worth RUB6.9 trillion, or over €90bn. In ruble terms, growth in procurements slowed to about 8% y/y. The federal government level last year sealed contracts worth €32bn, regions €42bn and municipalities €19bn.
Public agencies and firms in, which the state holds a stake of over 50% made contracts under procurement oversight worth RUB17.2 trillion, or €230bn. Oversight of this category has declined. Largely due to this, the amount of reported contracts fell significantly (even in nominal ruble terms) for the second year in a row. The reporting requirement has been dropped for e.g. real estate sales and rentals, as well as services related to bank loans and deposits. The ten largest buyers made contracts worth €75bn, led by Gazprom and its subsidiaries (€33bn), Russian Railways (€22bn) and Rosneft (€16bn).
Not all procurements are subject to oversight, and annual oversight reports do not try to estimate oversight coverage. Comparison to government sector budget figures suggests the oversight covers federal, regional and municipal procurements rather well. Oversight of public agencies and state-owned firms may be less than half of their total, even assuming the supply contracts are for not longer than a year.
Online auctions accounted in 2018 for 64% of the value of federal, regional and municipal procurement contracts, as in 2017, while no-competition contracts with single suppliers accounted for 23%. The latter method accounted for close to half in contracts made by state agencies and state- owned firms. Methods reported as unidentified were very common.
59 RUSSIA Country Report June 2019 www.intellinews.com