|
[Russian] Government launches budget sequestration after worst revenue collapse in 11 years
[Moscow Times] Since the beginning of the summer, the government has been unable to balance revenues with expenditures, and the accumulated total for June-August received a deficit of 1.452 trillion rubles. As a result, almost all the "surplus" of money that had been accumulated in six months had been spent by autumn: out of 1.589 trillion rubles at the beginning of June, only 131 billion rubles remained by the end of August.The budget is rapidly losing revenue under the pressure of sanctions and their consequences, Raiffeisenbank analysts write. Difficulties with the sale of oil to Asia and the shutdown of gas to European countries led to the fact that in July, oil and gas tax revenues collapsed by 29% yoy - a record for 11 years of available statistics. In August, they sank another 13%, to a minimum for 14 months (671.9 billion rubles). Fees from non-primary sectors of the economy fell in August by 14% in annual terms, to 1.157 trillion rubles. And the total budget revenues - by 10%, to 1.829 trillion rubles. At the same time, expenses increased by 8.4% year-on-year to RUB 2.174 trillion. As the recession in the economy gains momentum, the treasury receives less and less VAT, customs duties and income tax. As a result, the government needs more and more expensive oil to make ends meet. The 2022 budget would be balanced if a barrel cost $105, Orlova estimates. In fact, oil companies receive almost 30% less - $74.4 per barrel of Urals in August. If inflation is taken into account, then in real terms, the failure of non-resource budget revenues reaches 30%, and "this is a disaster," says Evgeny Suvorov, an economist at Centrocredit Bank. The government has the NWF in reserve, but in conditions when the currency is frozen by sanctions, spending from it is just a money issue, he says: the Ministry of Finance transfers the currency to the account of the Central Bank, and the latter "converts" it into "printed" rubles. Despite the difficulties with the budget, it is unlikely that the government will make significant spending cuts, Orlova doubts: "Overcoming the recession requires financing support measures, and the March 2024 electoral cycle dictates its own terms." Probably, by urging departments to tighten their belts, the Ministry of Finance "forms a reserve to cover other expenses," she suggests. Posted by: Snash Shairt9621 2022-09-16 |
| http://www.rantburg.com/poparticle.php?ID=644196 |