Page 66 - RusRPTFeb19

on 25 January.
The surplus was achieved due to two major factors – an overall economic policy by the government and a balanced and prudent fiscal policy aimed, among other things, at more efficient management of public funds.
Russia started this year expecting a budget deficit of 1.3% of GDP, but with the unexpected strong performance of oil prices the situation with Russia’s public finances improved dramatically. The last time the federal budget was in a headline surplus was in 2011 when revenues exceed expenditures by RUB442bn.
The estimates beat the Finance Ministry's revised target of 2.1% of GDP budget surplus for 2018. VTB believes that with another RUB 1.8tn of revenues to be collected in December, total budget revenues for 2018 could come to RUB19.3 trillion, which would be 2% above the ministry's plan.
The accumulated surplus continued to climb higher, reaching RUB 3.4tn in 11M18. The spending part traditionally lags, as it did in 11mo18, with the government having spent 84% of the planned amount.
Revenue execution plan exceeds 92% in 11mo18. In November, revenues came ahead of expectations (RUB 1.6tn vs. RUB 1.5tn), which was mainly due to non-oil & gas revenues (domestic VAT and corporate profit tax, in particular). Our federal budget model points to RUB 1.8tn of revenues to be collected in December, which implies total 2018F revenues at RUB 19.3tn. That would be 2% above the plan.
Spending lagged in November, the federal budget spent RUB 1.3tn, which is in line with normal seasonal trends. The speed at which spending is executed (83.7%) still lags that for revenues. This implies that if the government is going to spend 100% of the plan, in December, we shall see a +105% MoM increase in expenditure.
6.1.2 Budget dynamics - specific issues...
VEB published a macro projection for 2018-2021 with a base case featuring a pension age increase by half a year per year starting in 2020. The very next day, the projection was deleted from VEB's website. The
66 RUSSIA Country Report February 2019 www.intellinews.com