Page 85 - RusRPTApr24

The government also had a windfall from the non-oil and gas revenues that were up 55% y/y to RUB3.4 trillion. But remember this gain was from those terrible first months of last year when revenues crashed.
Taking out the low base effect from last year, MinFin said the non-oil revenue was “largely in line with budget projects.”
Total Russian budget revenues totalled RUB5 trillion ($55.4bn) in January-February. Expenditures in the same period were RUB6.5 trillion ($71.6bn) for the federal budget.
Expenditures 2M24
The problem is that while oil and gas revenues were above normal, budget spending was also above normal – and by a lot more than the extra trillion rubles MinFin gained from oil revenues; by twice as much.
Federal budget expenditures in February sharply accelerated to RUB3.2 trillion and RUB2.7 trillion in January to a total of RUB6.5 trillion for the first two months of this year, “which is a significant deviation from the seasonal norm,” according to the Bank of Finland institute for Emerging Economies (BOFIT).
Sailing close to the wind
So before you get lost in all these numbers, lets recap.
The government spent a total of RUB6.5 trillion in the first two months of 2024, of which at least a fifth is going on defence.
It made RUB5 trillion in the same period, of which RUB1 trillion was from exceptionally high oil and gas revenues and another RUB3.5 trillion from non-oil revenues, which were largely where they were expected to be.
Adding all this up and the cumulative deficit from the first two months is already at RUB1.5 trillion, which is just shy for the full year forecast of RUB1.6 trillion.
Going forward and that means MinFin will have to work very hard to keep the budget more or less balanced for the rest of the year and the balance will depend a lot on the unknowns of spending demands and the price of oil. However, given the target for this year’s deficit is only 0.8% of GDP, not 2% like last year, MinFin has a lot more wiggle room than last year.
Last year, MinFin dipped into the National Welfare Fund (NWF) to cover the budget shortfall, spending about half of the RUB6.8 trillion in Russia’s rainy
85 RUSSIA Country Report April 2024 www.intellinews.com