Page 9 - RusRPTNov21

2.0 Politics
2.1 The government issues a new pro-growth budget for
2022-2024, but anticipates falling oil revenues
A draft federal budget was submitted to the State Duma and published - with a surplus in 2022 and 2023 (1% and 0.2% of GDP, respectively) and a deficit at 0.3% in 2024.
The draft federal budget for 2022–2024 is based on the basic forecast of the Ministry of Economic Development, which is based more on targets than on forecast indicators and those targets are very optimistic.
After the collapse due to the pandemic in 2020, the Russian economy should show a recovery growth of 4.2% in 2021, and in the future - in 2022-2024 - it will grow by 3%, according to the forecasts.
That is, the authorities expect that the dynamics of Russian GDP will come in line with the goal set by Vladimir Putin back in 2018 ("growth is not lower than the world one") which has never been met since then.
Inflation in 2021 will accelerate to 5.8% in 2021, but in the second half of 2022, according to the official macro forecast, it will return to the target level of 4% and will remain within the Bank of Russia target in the future.
The price of oil by the end of the forecast period will decrease from $66 per barrel (on average for 2021) to $55.7 per barrel on average for 2024, the Ministry of Economic Development expects.
In the case of an accelerated energy transition, there is a high probability of the formation of a price trajectory at a lower level in the medium-long term, the Ministry of Finance stipulates. The dollar exchange rate in 2022-2024 will average RUB72-74, it is assumed in the forecast.
In fact, this forecast is an indicative plan, and there are risks that optimistic indicators - GDP growth by 3% and inflation by 4% - in 2022 will turn out to be unattainable, Alexander Shirov, director of the Institute of Economic Forecasting of the Russian Academy of Sciences, told The Bell.
He believes that in 2022, taking into account the tightening of monetary and credit (in September, against the background of accelerating inflation for the fifth time in a row, it raised the key rate to 6.75%) and budgetary policy, the Russian economy will face a slowdown in growth to 2.5% (such the scenario of the Ministry of Economic Development laid down in the conservative version of the forecast).
The dynamics of inflation amid a slowdown in domestic demand and deterioration of lending conditions (loan rates are growing along with the Central Bank rate) in 2022 will be below 4% next year, the economist believes.
9 RUSSIA Country Report November 2021 www.intellinews.com