The expert believes that the second half of the year for the Russian economy may be harder than the first
This year is approaching its «equator», and in the federal budget, expenditures still significantly exceed revenues. The Ministry of Finance reported that following the results of five months, in January-May, the budget deficit amounted to 3.41 trillion rubles. Recall that the government was drafting the budget for this year, laying in it a financial «hole» in the range of 2.9 trillion rubles. Will the authorities be able to keep within these tight limits or will the hole in the treasury continue to grow?
So, for the first five months of the year, the federal budget deficit amounted to 3.41 trillion rubles. The volume of federal budget expenditures for the first five months of the year is tentatively estimated at 13.2 trillion rubles, which is 27% more than the same indicator last year. While revenues (year-on-year) decreased by 19%, the treasury received 9.8 trillion rubles. The difference between these figures just gives the final deficit, slightly exceeding 3.4 trillion.
As in previous years, oil and gas revenues form the bulk of the treasury's income. But they, for certain reasons, fail, for the period January-May they «sank» by as much as 50%. The decline in Urals oil prices (oil of this Russian export brand has fallen in price by $5.3 per barrel and «black gold» is sold even below the $60 ceiling set by our «enemies») and the reduction in natural gas exports have played their role here.
At the same time, the Ministry of Finance reports that the monthly dynamics of oil and gas revenues is gradually entering a stable trajectory corresponding to the baseline. And the use of funds from the government's money-box, the National Welfare Fund (NWF), to cover lost petrodollars will ensure the stability of the budget system.
There is, however, some good news. Non-oil and gas revenues (the country does not live by oil alone) for five months amounted to almost 7 trillion rubles, which is 9% more than for the same period in 2022.
Will this trend continue and at what cost?
— It is encouraging that the budget deficit, although it remained large for five months of the year, at least did not add compared to the figure for 4 months — then it was 3.42 trillion rubles, — the leading expert of the Center for Political Technologies believes Nikita Maslennikov. — The spending of funds today is carried out more evenly and balanced than in the first months of the year. When there were abnormal upfront spending.
The Ministry of Finance notes a positive trend with non-oil and gas revenues. Even in the oil and gas industry, there has been a shift in five months. In January-April, the decline was fixed at the level of 52%, and now it is 50%. Progress, of course, is a microscopic, sparrow step. But there is hope that we will reach the basic level.
— In the high uncertainty of prices for «black gold». In addition, the slowdown in the global economy is noticeable, it is possible that the second half of the year will be more difficult than the first. The economies of many countries may be on the verge of recession. This is not ruled out either in the USA, or in Europe, or in China. Perhaps the demand for our energy resources will decline. So far, at the beginning of this month, we see a downward trend in the growth of oil prices.
— For five months we already have more — 3.4 trillion. So, you need to dramatically increase the flow of income. The non-oil and gas industries are highly dependent on business activity. While it develops more or less successfully. However, May has already shown a certain decrease in these rates. In terms of oil and gas revenues, it will be a great success if we reach the figure of 8 trillion rubles.
My expectations are that we will slightly exceed the annual limit. However, the fact that May's numbers are the same as April's gives some grounds for cautious optimism.
The economy is missing fiscal stimulus due to high deficits. Everything is simple. If you finance the budget deficit through domestic borrowing, you withdraw the same amount of funds from the economy. And the economic potential begins to slow down.
— Some solutions are being looked at. A one-time tax on business, about 300 billion rubles, due to the excess profits of previous years. Plus, the reduction in subsidies to oil companies as a result of the revision of the fuel damper … Spot adjustments cannot be ruled out. However, in general, it is undesirable to increase taxation. This will hinder business activity. The more stable the tax rates, the better and more efficient the business is.