Page 66 - RusRPTNov22

6.0 Public Sector 6.1 Budget
Russia's new draft budget (2023-2025) has reached the Duma. The underlying assumptions prepared by the Economy Ministry: The economy will shrink 2.9% this year, another 0.8% next year and growth of 2.6% in 2024 and 2025.
Russia expects a steady increase in oil exports from 250m to 255m to 260m tonnes in 23/24/25 after 231m tons in 2021 and an estimated 243.1m this year, with prices falling from $80 this year to $70.1 to $67.5 to $65 in 23/24/25. Oil products: Shrinking exports expected.
Russia is not expecting halted gas exports to Europe to resume (note: this forecast was created long before the NS1/2 explosions). In comparison to last year's budget outlook, expected gas exports are slashed in half (from 237.5 bcm to 125.2 bcm in 2023).
Budget spending was a lot higher than expected this year. In the next years, MinFin plans to not increase nominal expenditures (RUB29 trillion), despite inflation-index social payments and war. They probably want to dial back sanctions relief for companies.
Here are the details on "National defence" and "National security". Spending on both is skyrocketing. defence was planned at RUB3.5 trillion but was increased to RUB4.7 trillion this year (before mobilisation). Defence/Security in 2023 are 43.4% and 48.9% higher than in last year's guidelines.
There is a creeping realisation that the forecast rebound in consumption activity – and with it a large chunk of federal tax revenues – aren't recovering next year and 40% of Russia's GDP is now located in regions operating under creeping martial law. Per the Audit Chamber, budget revenues as a share of GDP are expected to fall from 19% for 2022 to 16.3% in 2025.
Russia’s government has requested allocating 1 trillion rubles ($16bn) worth of funds from the National Wealth Fund (NWF) for covering federal budget deficit this year, according to a respective decree by Prime Minister Mikhail Mishustin released on October 20. The Finance Ministry was charged with the task in accordance with the law on setting peculiarities of budget execution in 2022. The funds will be spent particularly on fully meeting social obligations to citizens, as well as on public borrowings substitution, redemption of national debt and extension of budget loans to regions, the ministry said.
66 RUSSIA Country Report November 2022 www.intellinews.com