Page 76 - RusRPTJan23

6.0 Public Sector 6.1 Budget
Russian President Vladimir Putin signed the law on the federal budget for 2023 and the planned period of 2024-2025, with the document posted on the official web portal of legal information.
According to the law, Russia’s budget expenditures will total RUB29 trillion ($465.7bn) in 2023, RUB29.4 trillion ($472.1bn) in 2024, and RUB29.2 trillion ($468.9bn) in 2025. Revenues will stand at RUB26.1 trillion ($419.1bn) in 2023, RUB27.2 trillion ($436.8bn) in 2024, and RUB27.9 trillion ($448bn) in 2025.
The deficit in 2023 is projected at 2% of GDP (or around RUB3 trillion ($49.3bn)), with mainly borrowings planned to be used to cover it. Meanwhile, it is expected that the budget deficit will gradually go down to 0.7% in 2025.
With Russia 1%-2% of revenues due to lower oil prices (and the oil cap) set at $60, what are other sources of revenues of the Federal budget? The most important revenues are VAT, profit taxes, and excises.
Russia plans to get RUB8.9 trillion oil/gas revenue in 2023. This would allow the budget to have a deficit of only 2% of GDP next year, but those expectations look unlikely now. This estimate is based on an average Urals oil price of $70.1 and and an average exchange rate of 68.3, ie. RUB4800 per barrel. In December, Urals is at $60 and the ruble at 60, ie. the Urals price in RUB is ~RUB3600/barrel (Russia has to offer discounts to find non-EU buyers).
The EU oil embargo could lower Russian exports and output by another ~1.5mbpd (considering that Russia will be able to redirect some, but not all oil). In October, Russia produced ~10mbpd, next year it could be closer to ~8.5mbpd. How does this change affect tax revenue?
76 RUSSIA Country Report January 2023 www.intellinews.com