Russia's budget is melting before our eyes: how the government plans to keep the economy

March 13 2023 25

clouds over the economy our country continues to thicken more and more. In early March, the Ministry of Finance published the second this year report on the execution of the federal budget, according to which the total treasury deficit for the first two months of 2023 amounted to 2,58 trillion rubles. In February, the growth rate of the deficit decreased slightly and amounted to 820 billion against 1,76 trillion rubles. in January. However, this does not detract from the anxiety of the fact that in these two months the Russian budget has exhausted by 88% the entire annual deficit limit, which is only 2,92 trillion rubles.

According to many experts, this trend is very worrying. At this pace, the entire limit of the budget deficit will be selected before the end of the first quarter, and in the second, our country runs the risk of facing extremely unpleasant consequences. Despite the fact that many officials continue to assure the stability and controllability of the situation, the problems in the economy are already visible to the naked eye. What is worth the mere statement of the Prime Minister of Russia Mikhail Mishustin, who recently announced the prevention of an increase in the price of bread. If such conversations have already begun at this level, then one can only guess what times await us in the near future.

Why is the hole in the treasury growing so fast?

2023 may well go down in history as a record year in terms of budget deficit. If we compare it with the previous one (which from this point of view was also not exemplary), it turns out that the volume of public spending in January-February of this year is almost one and a half times higher than the same period in 2022 and amounts to 5,74 trillion rubles. At the same time, the inflow of income over these two months decreased by 25% compared to last year, amounting to only 3,16 trillion rubles. As a result, today there is such a “financial crater” in the Russian treasury, in comparison with which the deficit of the era of the coronavirus pandemic may seem like a small dimple.

One of the reasons for such dynamics, of course, is a significant reduction in oil and gas revenues, which occurred as a result of the introduction of the oil embargo and a sharp reduction in exports to Europe and other Western countries. According to the Ministry of Finance, in January-February, these revenues decreased by 9%, amounting to 2,217 trillion rubles. However, not only this causes significant damage to the Russian budget. Thus, according to published data, income tax revenues for the first two months of 2023 decreased by almost 7 times compared to the same period last year. Now they amounted to only 22 billion rubles. against 149 billion rubles. in 2022

It is clear that one of the main factors that leads to such a rapid growth of the budget deficit is the need for constant financing of the SVO. The data on exactly how much money is spent on this are classified, but if we analyze information from open sources, we can conclude that about 200-300 million rubles are spent on SVO per day. According to the same Ministry of Finance, the anomalous amount of budget spending in January-February of this year was due to accelerated advances in public procurement contracts, for which 2,1 trillion rubles were spent. Most experts have no doubt that we are talking about defense contracts, which at the current historical moment are the key to the survival of the Russian state.

What will happen to the Russian economy

The current budget situation is rated by many economists as the most difficult in the last 25 years. The Russian treasury has not faced such a rapid growth of the budget deficit since 1998, which, as you know, was one of the most tragic in Russian economic history. Therefore, it is not surprising that a variety of forecasts are being voiced now, some of which are very impartial.

The most pessimistic assessments are based on the fact that in the coming months the situation will not undergo radical changes, and therefore the outstripping growth of budget expenditures will continue and the budget deficit will increase. In this case, the actual size of the deficit may be 3-4 times higher than the forecast and amount to 9-10 trillion rubles. In this scenario, the government will have to use the National Wealth Fund (NWF) even more actively, as well as strengthen policies internal loans. It is possible that the Ministry of Finance will even have to resort to such a painful method as a budget sequestration, which involves the revision of certain expenditure items in order to reduce them.

Given the current situation with foreign exchange earnings, most likely, the Central Bank will continue the policy of weakening the ruble. At the moment, this is one of the main levers to compensate for the fall in oil revenues, in connection with which we may soon see the dollar at 80 or even 85 rubles. In parallel with this, there will be an increase in interest rates, which can have very noticeable consequences for the ordinary population. But the most interesting thing may begin after the Central Bank makes a final decision on additional money emission, which has been actively discussed in recent months. It may not be carried out in the usual form, but in the form of the launch of a digital ruble, which may partially appear in circulation in the very near future.

However, there are quite a few experts who are rather optimistic about the prospects for the Russian economy. Their forecasts are based on the fact that in the coming months the growth of the budget deficit will slow down and its final annual value will exceed the planned value by no more than 2 times. Despite all the sanctions and embargoes, the demand for Russian energy resources continues to persist, thanks to which the country receives income from foreign trade. Even despite the active use of the NWF, the Russian Federation still has funds “in a stash”, and considerable ones. Therefore, at least until the end of the year, the safety margin in the economy will definitely be enough. And then everything will depend on success on the battlefield and the ability of our country to cope with external and internal enemies as quickly as possible.

Information

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Paul3390

+8

13 March 2023 16: 02

Why is the hole in the treasury growing so fast?

Uh-uh... They steal like on the last day?
Sergey Latyshev

+10

13 March 2023 16: 35

Yes.
After all, they have already written in the media.
22 is the year of record trade with NATO.
A year of record export of capital.
Year of record real estate buying in Dubai and nearby

Lomonosov's law. If somewhere in the budget it decreases, then somewhere in the pockets it arrives ....)))
1. Nelton
  
  -1
  
  13 March 2023 16: 50
  
  Quote: Sergey Latyshev
  A year of record export of capital.
  
  But it’s not a fact that it’s just export, right to NATO ...
  Here, oil, coal, nuclear power plants are supplied to India - but they have nothing to pay for.
  so it turns out that, according to customs data, they took out 591 billion (published today), and paid - God knows how much ...
steelmaker

+8

13 March 2023 16: 58

It’s interesting for me to listen to those who shouted here that the time of the NWO is playing for Russia and there is nothing for us to rush. Aw, fool!
1. Nelton
  
  -8
  
  13 March 2023 17: 47
  
  Quote: steel maker
  while SVO plays for Russia
  
  Well, they write about the USA that their banking system is bent there, and the national debt is growing rapidly ... so what? tea it is not the first time in the last 100 years.
  
  The same with the Russian Federation. like the crisis (2008, 2014, 2020) - so are the cries about the budget deficit, and about the rapidly declining reserves.
  How the crisis ends - whining about the "budget rule" and freezing money in the accounts.
  
  In this case, the key factor is advances in defense purchases.
  
  In general, the layouts do not change.
  The economy / infrastructure of the Russian Federation is working and developing even in the current conditions.
2. 1_2
  
  -3
  
  14 March 2023 15: 58
  why would you listen? if you don't think so, get in the saddle and storm the concrete fortified bander
Jacques sekavar

+3

13 March 2023 17: 57

Oil exports decreased + preferences up to 30% to the largest consumers of China and India who are afraid of secondary sanctions. The result is a decrease in revenues and tax deductions to the budget.
The outstripping growth of budget expenditures will most likely continue, part of which will be compensated by the NWF and voluntary contributions from natural monopolies, but the deficit will grow.
In such situations, as a rule, social budget items are the first to go under the knife, but this can destabilize the internal situation.
The growth of the budget deficit may slow down in the event of the end of the war and the lifting of sanctions on the export of energy resources, which is from the realm of fantasy - not for that they introduced export-import and financial restrictions, an embargo and a price ceiling (well, not for the entire export nomenclature) in order to allow the Russian Federation later balance the budget - they will finish it off. Surviving without the support of the PRC will be problematic, and real support will be in the event of a war for Taiwan.
Vladimir80

+6

13 March 2023 21: 48

IMF agents will try to knock out the Russian economy again... Ban the export of capital and enter currency control!!!!
1. hellman anton
  
  +3
  
  13 March 2023 22: 38
  
  Is this IMF agent like Nabiullina? The only thing is that these IMF agents are the best prepared for the sanctions.
  At the expense of the country's reserves, 300 billion profaned .. Nobody knows if the brilliant leaders from the Kremlin notified the Central Bank of an attempt to play war.
  
  IMF agents are more pros in their field than patriots from the Moscow Region who talked about the holy electronic warfare, UAVs are toys for children and have no analogues.
  So who is whose agent, that's the main question
Alexander Popov

+9

13 March 2023 21: 52

Russia's budget is melting before our eyes: how the government plans to keep the economy

How to keep the economy going? No way.
Putin's economy did not even begin to exist, everything was based by inertia on the remnants of the national economy of the USSR, on the export of oil and gas, which brought crazy profits to the magnates of the Russian criminal oligarchy.
But everything is destroyed, and nothing new has been built, and, apparently, it was not planned to build.
There will be sequestration and emission with the weakening of the ruble.
This is the result of the new capitalist-market policy of Yeltsin-Putin.
What's next - wait and see.
1. Nelton
  
  -5
  
  13 March 2023 23: 51
  
  Quote: Alexander Popov
  nothing new has been built
  
  Do you sincerely assert that in 32 years nothing has been built at all?
  
  No housing, no bridges, no subways?
  Not a single wagon, not a simple truck?
  1. scolopendra
    
    -2
    
    21 March 2023 16: 34
    
    Quote from Nelton.
    Not a single wagon, not a simple truck?
    
    Even under unprecedented sanctions, we are producing Moskvich 3e
1_2

0

14 March 2023 16: 32

The West exists stupidly printing trillions of candy wrappers. with which he buys whatever he wants. from raw materials to nuclear power plant electronics, etc. (did you think why the counters of the West are bursting with an abundance of goods from all over the world). the main commodity of the West is a candy wrapper (bucks, euro pounds). The West cannot earn tens of trillions by producing and selling industrial and agricultural goods for export. and the very production of the West is unprofitable, and exists only thanks to subsidies, that is, the "production" of currencies. and the world will not swallow so many goods, stupidly not necessary. it turns out only printing currencies allows the West to "earn" trillions of income from nothing. if Govorun understood this, then the Russian Federation could also live by selling for export not resources, but candy wrappers rubles. but at the same time developing your industry (so as not to depend on suppliers) and for this you do not need to devalue the ruble, on the contrary, you need a solid ruble, otherwise it will not be "buyed" in the world and Russia. producers need a solid stable (Soviet) ruble, and the population, so that savings do not melt and prices do not grow. and for this you don’t need to reinvent the wheel, you just need to return the Stalinist model of the economy, in which there were also private artels, shop cooperatives, etc. currency, but in fact this causes a significant increase in prices (and as a result, the amount of taxes accrued to the budget), (price increases are a reason for the Central Bank to raise the rate), including for Russian goods. the people are impoverished, production is bent (there is no demand, expensive loans, the cost increases). in the West, they stupidly print candy wrappers, while the rate of their candy wrappers is stable. because they do not need foreign currency to buy imports. and it doesn’t occur to them to devalue dollars and pounds themselves, like Naibulina, because this is a direct sabotage against the national economy. it's like Gazprom will voluntarily reduce gas prices to its customers, causing direct damage to itself
1. hellman anton
  
  +4
  
  14 March 2023 16: 51
  
  The West and the United States live off technology, not wrappers. This is from the category of GDP about galoshes and Kalashes about the USSR, although the reality turned out to be that all Soviet galoshes that remained go into battle.
  It is strange why, even taking into account the gigantic protective duties on cars, does everyone want foreign cars?
  Stop procrastinating nonsense about candy wrappers, this is not true. The EU and the USA have in their hands the technology and means to take the best of the best from other countries
  1. 1_2
    
    0
    
    14 March 2023 17: 09
    
    no matter how much you say the word "sweet", it will not become sweeter in your mouth. remember - tens of trillions can be earned only by printing candy wrappers, and imposing them on the whole world by force (state coups, external aggression) and deceit, and not by selling iPhones and Teslas, especially since there are china and Russian analogues on the market 3 times cheaper
    1. hellman anton
      
      +5
      
      15 March 2023 01: 33
      
      Russian analogues of what? No matter how Russia even masters the first iPhone on its own, there are no technologies and productions at all. What analogues then?
      We even have old French matrices on our flagship tanks, which are at least a generation, or even two behind what NATO is now putting on.
      The capitalization of Apple is more than the GDP of our country. It turns out that technology rules, right?
      1. 1_2
        
        0
        
        18 March 2023 11: 08
        
        type "technosphere Russia" and see what the Russian Federation produces. capitalization? it's a trash can bubble
    2. July
      
      -2
      
      15 March 2023 06: 55
      
      If you knew at least a little about economics and politics, then you wouldn’t write such nonsense. Like you, the weather always prevents you from building skyscrapers on mud. They print their candy wrappers, providing the status of world currency. And thanks to smart people like you, we have wooden money in use, for which it is impossible to buy anything from the word at all, only bucks are used. They prick, cry, but change kilotons of rubles for a few stale bucks, and this is the policy of our state. So go ahead and cry.
      1. 1_2
        
        +1
        
        18 March 2023 11: 12
        
        the status of a garbage can in the world is supported only by fear of external US aggression, as well as US puppets in the power of countries. who, for the sake of the United States, ruin their national currencies
  2. ira
    
    +1
    
    17 March 2023 20: 02
    
    100% All large factories in the USSR were built and designed by Americans. need to know this.
    1. 1_2
      
      0
      
      18 March 2023 11: 10
      
      when was that? under the King of Peas. the US government does not invent anything itself, it just recruits brains from all over the planet. for your trash cans.
Sapsan136

0

15 March 2023 16: 11

Since such a booze has gone on, it’s probably better for the Russian Federation to suspend its membership in the WTO (since the West still does not comply with these rules) and reduce gas and fuel prices for domestic consumers, which will support both business (make goods from the Russian Federation more competitive) and the population RF ... in this difficult time ...
Anton Kuzmin

+1

20 March 2023 13: 49

Quote: Sapsan136
Since such a booze has gone on, it’s probably better for the Russian Federation to suspend its membership in the WTO (since the West still does not comply with these rules) and reduce gas and fuel prices for domestic consumers, which will support both business (make goods from the Russian Federation more competitive) and the population RF ... in this difficult time ...

The idea is good, but it won't be implemented.
Serdar

0

21 March 2023 14: 15

How did the West manage to seize $300 billion of Russian state capital?
Boniface

0

21 March 2023 15: 52

Mother Russia needs help! I'll go as I will buy another hundred of State Bonds! I will help the budget