Page 33 - bne IntelliNews monthly magazine May 2024

bne May 2024 Cover Story I 33
Russia’s oil and gas revenues surged in the first three months of this year by 79%, but Reuters calculated they will double in April compared to the same month a year earlier, the newswire reported on April 24.
Reuters calculates Russia’s total revenue at RUB1.292 trillion ($14bn), up from RUB648bn ($7bn) in April 2023. That is slightly down from the RUB1.308 trillion ($14.1bn) generated in March.
The results of the first three months saw Russia’s budget deficit halved, affected by a poor result in February. Russia's budget deficit fell from RUB1.5 trillion in February against the full-year forecast of RUB1.6 trillion, but narrowed to RUB607bn for the first three months of the year, or 0.3% of gross domestic product (GDP), supported by a surge in oil prices. Oil and gas revenues in the first three months of this year surged 79% year on year and make up about a third of Russia’s tax take.
The Ministry of Finance (MinFin)’s forecast for the full 2024 deficit is also half last year’s deficit of 2023 of RUB3.2 trillion, or 1.9% of GDP.
For 2024 as a whole, the government has budgeted for federal revenue of RUB11.5 trillion from oil and gas sales, up 30% from 2023 and reversing that year's 24% decline owing to weaker oil prices and sanctions-hit gas exports. Reuters' calculations are based on data from industry sources and official statistics on oil and gas production, refining and supplies on domestic
and international markets.
As bne IntelliNews reported, one year on from Russia’s disastrous start to 2023, the Russian budget has improved remarkably.
Reuters’ upbeat assessment is partly
due to a low base effect, after oil and
gas revenues fell by 49% y/y in January last year as the twin oil and oil product sanctions came into force on December 5, 2022 and February 5, 2023 respectively.
At the same time, Russia posted a very large RUB3.2 trillion deficit at the end
of 2022 after 11 months of surpluses, and started 2023 with a record breaking RUB1.7 trillion deficit in January 2023 – almost the entire allotment for the full year – and actually exceeded the full- year deficit forecast in March 2023.
By December 2023, the budget was on course to come in under 1% of GDP when many analysts were predicting
it would finish 2023 at 3-6% of GDP. However, traditional heavy spending in December saw the final full-year deficit
“One year on from Russia’s disastrous start to 2023, the Russian budget has improved remarkably”
However, the situation rapidly reversed last spring and all those results recovered as the year wore on. The MinFin tinkered with the tax system to take account of the new realities and
oil tax dollars began to flow again in around March. Oil revenues recovered completely in the second half of the year.
of 1.9% of GDP, or RUB3.4 trillion. December usually accounts for a fifth of all spending in that month alone, as the chart shows.
The modest cumulative deficit percentage in 2023 was helped by the unexpected strong economic growth of
5,679 53.5
1,635 79.1
4,044 43.3
2,693 24.6
7,765 20.1
-2,086
-1.2
Russian budget (RUB bn)
Revenues
Oil & gas rev
Non-oil & gas
VAT
Expenditures
Deficit cash
Deficit GDP
Source: MinFin
8,719
2,928
5,791
3,356
9,326
-607
0.3
3M24
3M23
Change% y/y
Russian budget (monthly RUB bn)
Source: Russian MinFin
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