MOSCOW, November 19, Elena Savelyeva. According to preliminary data from the Ministry of Finance, from January to October the federal budget deficit decreased to 1.235 trillion rubles. This is only 0.7% of GDP. Read about how we achieved this result and whether we will be able to turn a profit before the end of the year.
Consistent reduction
Back in January-August, the deficit reached 2.361 trillion, or 1.5% of GDP. In August, a turning point occurred: they returned to a surplus of 230 billion (according to Western analysts — about 450). In September there was even more: 662 billion. As a result, the total accumulated minus for the month was recouped by almost 30%. In October, the trend continued: plus 464 billion.
Where does the money come from
Non-resource exports helped significantly, compensating for the decline in the oil industry. This income item increased by 28.7% over ten months, to 15.86 trillion. We expected much less.
“The dynamics of the largest non-oil and gas revenues of the federal budget (turnover taxes, income tax) remains in a consistently positive area, including the level of 2021 (as it is less susceptible to statistical base effects),” the ministry emphasized.
As the analyst explains Alfa Capital Management Company Alexander Dzhioev, one of the factors here is the acceleration of inflation. Circulating taxes — primarily VAT — bring more in such conditions.
Oil and gas revenues over the same period decreased by 26.3%, to 7.21 trillion rubles. However, in October, according to the Ministry of Finance, they exceeded last year’s figures by 27%: 1.635 trillion rubles (in September it was 740 billion).
“
"This was ensured by quarterly taxes on additional income (ATI) of oil workers and rising prices for oil against the backdrop of a weak ruble and the lack of damper payments,” explains Pavel Sokol, a financial analyst at the Finmir marketplace.
From November 1, the export duty on oil increased by 2.3 dollars, to 26 .2 per ton. For light petroleum products and oils — up to 7.8 per ton, for dark petroleum products — up to 26.2.
The reduction in the state budget deficit is a consequence of rising oil prices and a decrease in the discount of Urals to the reference Brent brand. The average price of the main export grade reached $83.35 per barrel by mid-October.
«
According to the International Energy Agency (IEA), in September Russia exported $18.8 billion worth of oil (the maximum since July 2022) — an average of $81.8 per barrel. The Western price ceiling does not work, restrictions are not observed.
The budget was supported by tax revenues from business and the population. In addition, at the end of the year, large enterprises will pay a one-time excess profit tax.
«
«It is important that GDP is growing, although a fall of up to 6.5% was predicted. Now, according to a Central Bank survey, analysts have improved the forecast from plus 2.2% to 2.5%. The greater the GDP, the greater the tax revenue and the faster the deficit is reduced,” explains Guzel Protsenko, General Director of Alfa-Forex.
As noted by the Ministry of Finance, in general, in 2023, government spending is regulated by the current budget law and additional non-oil and gas revenues in accordance with the budget rule. “This ensures the stability of the primary structural deficit at the level of the given parameters,” the department emphasized.
Better than forecast
According to the law on the federal budget for 2023 and the planning period of 2024-2025, annual revenues are 26.13 trillion rubles (17.4% of GDP), expenses are 29.056 trillion (19.4% of GDP). The deficit is 2.925 trillion, or two percent of GDP.
However, apparently, we may well see a near-zero deficit or even a surplus, believes Alexander Dzhioev.
“
"Obviously, the total will not exceed minus two trillion — this is a moderately negative scenario. Most likely, it will be much less,” believes Andrei Loboda, economist, director of communications at BitRiver.
Finance Minister Anton Siluanov said the same thing in an interview with Asharq News Bloomberg.
“Indicators lower than we expected, and this year we estimate the budget deficit at just over one percent of GDP, although we planned two. Expectations for economic growth dynamics are higher than those of the International Monetary Fund — 2.8%,» he said. And he added: despite all the restrictions, challenges and instability of the global economy, “the finances of the Russian Federation feel stable.”