Page 67 - bneIntelliNews monthly country report Russia May 2024

paid by the companies observed.
6.0 Public Sector 6.1 Budget
Russian budget revenues were up by more than 50% in the first quarter of this year compared to 2023. In March, the state budget even recorded an overall surplus of 867 billion rubles ($9.3 billion). The growth in income was not entirely down to high oil prices, with tax income unrelated to natural resources also playing a role. So does that mean Russia’s treasury is now awash with cash, and can it better meet the record surge in spending?
The International Monetary Fund (IMF) has raised its forecast for Russia’s economic growth to 3.2% in 2024 — ahead of predictions from Russia’s own economy ministry (2.3%) and the central bank (1-2%). Those forecasts are also set to be revised higher at the next review. The IMF said it sees the Russian economy staying overheated, rather than slowing down.
Domestic demand will be further supported in the second quarter of the year by government spending. According to the consolidated budget schedule, by mid-April, the ministry had allocated 11.7 trillion rubles out of a planned 37.3 trillion — a slower rate of spending than in 2023 when the government front-loaded some large expenditures.
The finance ministry has anticipated additional spending, beyond that already approved, of 1 trillion rubles ($10.7 billion) a year to include funding for Putin’s election promises. For the moment, the plan is to pay for them through spending cuts in other areas as well as higher taxes. Siluanov has dodged questions about exactly how. IStories has reported on potential plans to increase the maximum rate of personal income tax from 15% to 20% and raise corporate tax rates to 25%. The latter could generate up to 2 trillion rubles ($21.4 billion) a year. The final parameters will be agreed when the newly-formed government is unveiled (which will probably be by May 20).
The finance ministry is aiming for a budget deficit of 1.4-1.5 trillion rubles ($15-16 billion) for 2024, which would meet the official plans for a shortfall of 0.9% of GDP. At the moment, that looks achievable. The budget is being supported by a widening current account surplus — up 43% year-on-year to $22 billion in the first quarter. Russia’s imports and exports both decreased, but the former fell more sharply (a 10% drop in
67 RUSSIA Country Report May 2024 www.intellinews.com