Page 73 - RusRPTNov21

6.0 Public Sector 6.1 Budget
The just-unveiled parameters of the 2021-23 federal budget were generally in line with what was previously disclosed in the media.
Revenues are expected to climb to RUB18.8 trillion in 2021, up from RUB17.9 trillion in 2020, and then rise to RUB20.6 trillion in 2022 and RUBR22.3 trillion in 2023.
Expenditures will shrink to R21.5 trillion in 2021, down from R22.6 trillion in 2020. The higher spending this year was due to measures taken to combat the pandemic. Nominal expenditures are then slated to rise to R21.9 trillion in 2022 and to R23.7 trillion in 2023.
As a result of these plans, the budget deficit is expected to shrink to RUB2.8 trillion (2.4% of GDP) in 2021, versus RUB4.7 trillion (4.4% of GDP) in 2020. In 2022-23, the deficit is set to stabilize at RUB1.2-1.4 trillion (1.0-1.1% of GDP).
The main source of financing the deficit in 2020-23 will be borrowing, which will even exceed the budget deficit over all three years. Next year, net borrowing is expected to slide to R2.9 trillion, down from R4.4 trillion this year. In 2022-23, it will stabilize at R2.1-2.4 trillion, thus substantially exceeding the expected budget deficit.
The reason for this is that the government plans to start accumulating additional oil and gas revenues in the NWF to the tune of about R0.7 trillion in 2022 and R0.8 trillion in 2023.
2020 saw a record amount of “closed” expenditures in the Russian federal budget
Nominal government revenue growth is projected to reach almost 20%. Oil and gas tax revenues will rise more than 60% from last year’s pit as oil prices rise sharply. Other budget revenues are estimated to grow by more than 10%. Expenditure growth will slow down from last year's stimulus increase, but will still be around 8%. Public finances turned into a sizeable deficit in 2020 (4% of GDP), but the deficit is projected to decline to only half a% of GDP this year.
Oil and gas revenue: Between 2022 and 2024, GDP growth is expected to remain at 3% per year, according to the Ministry of Economic Affairs' forecast. The price of Urals export oil is expected to gradually decline from $66 this year to $56 in 2024, but on the other hand, crude oil production and exports are expected to grow strongly in 2022 as the OPEC + production constraint is gradually removed. As a result, the budget's oil and gas tax revenues will increase well next year. The growth rate of other revenues in the consolidated
73 RUSSIA Country Report November 2021 www.intellinews.com
: 13% of the National Economy section. This is compared to
less than 5% in 2019 and only 2.4% in 2021. Closed budget expenditures
include spending on national defense, national security, and law enforcement.