Page 69 - RusRPTJun20

ran a 1.8% GDP surplus. This year, the economy ministry projects an 8.5% GDP deficit due to the collapse of oil prices that will cost on the order of RUB3 trillion, that will be mostly covered by funds in the National Welfare Fund (NWF). Russia’s fiscal policy is thus facing a relaxation worth 10% GDP—greater than the stimulus announced in many developed nations, Reshetnikov argues. The government is reportedly considering another anti-crisis measure: early retirement. According to Vedomosti, pensions may be offered to individuals within three years of the retirement age who have lost their jobs during the pandemic. This measure effectively existed pre-COVID for Russians who lost their jobs within two years of retirement. If it is extended to three years, it will be available to women aged 52.5 and men aged 57.5.
Russian military spending to GDP (3.9 %) was significantly higher last year than in any other European country, China or the US​. About half of Russian military spending [...] has gone to procurement of equipment and weapons systems, a level high by international standards."
Data compiled by the Stockholm Peace Research Institute (SIPRI) show that total military expenditure by national governments last year amounted to $1.92 trillion, a nearly 4% increase in real terms from 2018 and up by over 7% from 2010.
The world’s biggest military spenders in recent years have been the US, China, India, Russia and Saudi Arabia. Together they account for about two-thirds of global military spending. The United States, unquestionably the world’s biggest military spender last year ($732bn), was followed by China ($261bn). China’s military spending is roughly on par with the total military spending of all EU countries combined.
SIPRI figures show Russian military spending declined sharply between 2016 and 2017, but grew rapidly last year back to 2013 levels ($61bn).
SIPRI compares national military expenditure by converting reported amounts to dollars at current exchange rates. Differences in price levels likely lead to underestimation of the real level of military expenditure in e.g. Russia and China relative to the US. Nevertheless, even if purchasing power parity (PPP) index for military goods existed, the order of the countries in terms of real spending would remain unchanged. Using the overall PPP index for GDP, Russia’s military spending still was less than a quarter of US military spending last year.
6.1.3​ Budget dynamics - govt funding plans
On May 21 Russia’s Finance Minister Anton Siluanov said that the so-called “budget rule” would not be cancelled or suspended​, following the reports that the government is preparing to soften the rule for 2020 and 2021 as it ​prepares a fiscal stimulus package​.
The budget rule caps the spending at the threshold of $42 per barrel oil price, and is seen as one of the pillars of Russia's prudent fiscal policy. Siluanov has consistently defended maintaining the budget rule in place, but allowed for the revision of the reference oil price.
Sberbank CIB on May 22 estimated that should the budget rule be maintained,
69​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com