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2.0 Politics
2.1 Siluanov gives 2020 budget spending plan details
The Finance Ministry Anton Siluanov expects Russia’s gross domestic product (GDP) to contract by 5% in 2020 under the baseline scenario, he said in an interview to Vedomosti business daily.
“There are several scenarios, and all of them are not too optimistic. We used a 5% GDP contraction this year as the baseline scenario, and meets the estimates of the central bank (which expects the economy to shrink by 4–6% this year),” he said as quoted by Vedomosti.
Budget deficit should amount to about 4% of GDP this year, while budget revenue may contract by about RUB4 trillion as compared with the plan. Oil and gas revenue will fall by 1.5 trillion rubles and non-oil and gas revenue by about 2 trillion rubles.
But the government will not cut spending, it will even increase it. “We will use the money of the National Wealth Fund and borrowing to finance current obligations and the anti-crisis programs,” Siluanov said.
Budget spending will be raised by RUB1.07 trillion in 2020, as the government will use the income from the purchase of the controlling stake in Sberbank from the central bank. “And we should stay at this increase of the spending. We also have carryovers from the previous year of 1.1 trillion rubles, and will spend a part of them,” he said, adding that the coronavirus force majeure should not result in a nonfulfillment of the budget this year.
He also said that spending on national projects in 2020 may be adjusted, but all social obligations would be fulfilled.
Average support of the economy from the budget will exceed 6.5% of GDP this year. “So far, we made decisions on 2.8% of GDP, but it does not include spending from the National Wealth Fund’s money and additional borrowing that we are doing to support the planned spending. This is a counter-cycling budget policy: we finance spending in full in spite of losses in revenue. Taking into account this money, support of the economy may be estimated as more than 6.5% of GDP,” he said.
The government will spend RUB200bn on support of the healthcare and epidemiologic sector, more than RUB250bn on social support, RUB800bn on support of the economy, about RUB200bn on support of regions, and more than RUB400bn to balance non-budgetary funds, he said.
He said that there is no underfinancing of the medical industry from the budget. In other countries, private money goes into the healthcare sector, as people pay for medical insurance on their own, while in Russia the state has a part in it.
“What does underfinancing mean? Insurance principles should work in medicine. They should spend as much money from the fund for obligatory
8 RUSSIA Country Report June 2020 www.intellinews.com
