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export of 125bn cubic metres of gas. However, this is completely inaccurate — as Alexander Isakov from Bloomberg Economics pointed out in a post on the Cold Calculation Telegram channel. The macro forecasts also fail to take into account the explosion on the Nordstream pipeline, which happened just before the budget was submitted to the Duma in September. “If 90bn cubic metres [of gas] are exported, that’s already a good result,” Isakov said.
On top of this, the state budget ignores caps on oil and gas prices and Russia may agree to gas discounts and payment deferrals for Turkey in 2022 and 2023 (Ankara is asking for as much as a 25% discount). “I value them at $29bn and $42bn respectively – we are talking about $18bn,” wrote Loko Bank analyst Dmitry Polevoy.
Russia extended a deferred payment of insurance premiums until 2024 in February. In December, the budget deficit was 2.1 trillion rubles greater than planned — one of the reasons was that it was needed to pay off 772bn rubles in deferred insurance premiums. How the government spent the remaining 1.3 trillion rubles is unclear. The decision to defer this month means these costs won’t be reflected in the budget until 2024, according to the Solid Figures Telegram channel. Thus, the budget deficit is likely to be 2.3% of GDP (officially, it is expected to be 2% based on oil prices of $70 a barrel).
A decrease of $10 in the average price of oil over the course of this year would cost Russia a total of about $15bn, estimated Elina Ribakova, deputy chief economist at the IIF. Bloomberg Economics has even more conservative estimates: if Urals costs an average of $50, the deficit will increase to about 3% of GDP.
However, Russia has sufficient reserves of gold, yuan and euros to cover the deficit for the next three years. The sale of foreign currency could increase from 55bn rubles this month to 120bn rubles in February, Bloomberg estimated. Russia would burn through its entire reserves of yuan in a year if oil prices fell to $25 — but this is very unlikely.
2.2 Russian communal services in decay
The investigative outlet IStories published a long article
Since the fall of the USSR, the federal government has attempted to reform
degradation of communal services in Russia and its implications for
Russian citizens, including a growing number of accidents involving bursting
pipes and sewage floods, as well as growing tariffs. As the article outlines, the
amount of communal infrastructure in need of repair has consistently grown
over the past 25 years, even according to official data (which likely
underestimates the gravity of the problem). The situation appears to be worse
in smaller, poorer cities, such as Kurgan and Kyzyl.
about the
communal services at least once a decade (most recently in 2018), with barely
anything to show for it. Even as tariffs have grown, the pace of repairs has
slowed. This issue was highlighted in a
money into the sector, actually ended up wasting public funds. In this sense, it
is similar to other failed policies, such as the 2019
government report
last year. Public-
private partnerships, through which the state attempted to attract private
waste management
reform
. This reform failed to significantly improve recycling or solve the
11 RUSSIA Country Report March 2023 www.intellinews.com