Page 73 - RusRPTFeb23

6.1.1 Budget dynamics - results
In January, Russia’s finance minister Anton Siluanov announced that the
budget deficit amounted to 2.3% of GDP in 2022. This came as a surprise
as it was 0.5% of GDP larger than we and most had expected, suggesting
quite a marked deterioration towards the end of the year. Indeed, the limited
figures available show expenditures surging by 43% y/y in December.
The government projects a narrowing of the deficit to 2.0% of GDP in 2023 but
Capital Economics thinks this is overly optimistic. Gazprom’s total tax bill is
estimated to have accounted for 18% of the government’s total tax intake last
year. Falling energy export volumes and lower energy prices will put a lot more
pressure on the public finances.
The oil price required to balance the Russian budget jumped from $67 to
$101-$115 a barrel in 2023. To cover the budget hole, the government would
need to adjust its fiscal policy, either by cutting spending, looking for additional
revenues or by tapping into the NWF.
Given that the 2023 federal budget is based on a projected Urals price of
just over $70 a barrel, and prices are currently trading closer to $50, this
could prove problematic for the budget.
Analysts say that as the government increased spending by more than a
quarter in 2022, in part to finance its military in Ukraine, the oil price required to
balance the budget jumped from $67 to $101 a barrel. Russia's budget hole
last year totalled 3.3 trillion roubles ($49bn), or 2.3% of gross domestic
73 RUSSIA Country Report February 2023 www.intellinews.com