Page 74 - RusRPTNov21

budget, such as VAT revenues, is estimated to slow down to around 5% per year from next year, which is clearly slower than in the years before the recession.
Nominal growth in government expenditure is projected to slow to around 4.5% per annum in the coming years, only slightly faster than projected inflation. The level of expenditure is higher than previously estimated due to the rapid rise last year and this year. Their ratio to GDP will fall from 40% last year to around 35% by 2022-2024. With increased revenue estimates, the consolidated budget is slightly in surplus.
Expenditure on education is set to increase in the next few years at a fairly steady annual rate of 6-7%. For a long time to come, internal security and law enforcement will receive a brisk increase in spending next year, followed by increases in line with inflation. Defence spending is growing very slowly, but a clear increase is promised for 2024. After a rapid rise in the last couple of years, growth in spending on different sectors of the economy is set to weigh very slowly. After several years of rapid growth, health care expenditure is growing below the inflation rate, and expenditure on social benefits (including pension expenditure) is also developing at the same pace. After a rapid rise last year and this year, nominal growth in administrative expenditure is set to freeze.
General wage increases in the general government budget are to be kept in line with inflation, with the exception of e.g. health and education special groups, which are promised increases in line with projected wage growth across the country. Pensions will rise slightly faster than inflation under the 2018 law, which applies to retirees who are not working.
Despite the slight budget surplus, the state borrows domestically, as the budget rule allows part of the oil and gas tax revenue to be transferred to savings and further to the National Welfare Fund. Government debt is estimated to be just over 20% of GDP at the end of 2024 and the fund's total assets to rise to 15% of GDP. In the next few years, the fund will be granting loans for domestic infrastructure projects.
Main parameters of 2021-2023 federal budget
2020
2021
2022
2023
Revenues RUB trillion
17.9
18.77
20.64
22.26
Expenditures RUB trillion
22.6
21.5
21.9
23.7
Budget deficit RUB trillion
-4.7
-2.8
-1.2-1.4
-1.2-1.4
74 RUSSIA Country Report November 2021 www.intellinews.com