Page 69 - bneIntelliNews monthly country report Russia May 2024

The finance ministry anticipates that higher oil and gas revenues will continue. “Exporters have established supply chains,” Finance Minister Anton Siluanov said recently, downplaying the impact of the oil price cap and other Western sanctions. Even if one-off factors and favorable year-on-year comparisons will be less of a factor in future quarters, the new tax formula, combined with high oil prices, means the ministry can easily reach its revenue targets.
The increase in non-energy revenues is being driven by Russia’s overall economic growth. Higher domestic demand and more spending has resulted in more income for the state — primarily through sales (VAT) and turnover taxes. Even amid high inflation, people are earning more and spending more, Raiffaisen Bank analysts say.
The Russian economy accelerated last year on the back of increased budget spending and import substitution, or higher demand for the kinds of intermediate goods and services needed to replace foreign components. In the first quarter of this year there was no sign of a slowdown, despite interest rates of 16%. Russia’s GDP was up 4.6% in January and 7.7% in February (when the extra day on Feb. 29 provided an additional boost) calculated for The Bell.
After reaching close to $18bn in the fall, Russian oil exports have hovered around $15-16bn in recent months. Somewhat smaller volumes offset higher prices in February, but Russia could see exports rebound without further action. The $3.40/barrel rise in the average export price delivered ~$470mn in additional earnings from crude oil last month.
69 RUSSIA Country Report May 2024 www.intellinews.com