29 May 2024 18:06

Russian budget deficit may be slightly higher for 2024 than planned due to lower oil and gas revenue forecast - Kolychev

MOSCOW. May 29 (Interfax) - The draft amendments to the budget law for 2024 and the 2025-2026 planning period, which the Russian Finance Ministry introduced to the government together with changes to the Tax and Budget Codes, involves changing the main parameters of the current year; while the structural deficit will remain the same, overall it will be slightly higher than the figure planned for this year in absolute terms due to a lower forecast for oil and gas revenues, Deputy Finance Minister Vladimir Kolychev told reporters.

The budget law for the current year provides for a deficit of 1.595 trillion rubles, or 0.9% of GDP. Finance Minister Anton Siluanov said in an interview with Interfax in April that the budget deficit at the end of the year is expected to be within the framework of the plan. According to the Electronic Budget portal, revenues had reached 11.75 trillion rubles as of May 28 with a plan for the year of 35.06 trillion rubles, and expenses of 14.84 trillion rubles (37.3 trillion rubles according to updated calculations for the year).

"Yes, the parameters [the main parameters of the budget] are changing. We see that the economy has been growing more dynamically since the beginning of the year, and accordingly, the revenue base is growing more dynamically as well. The government, represented by the Ministry of Economic Development, has changed the forecast, accordingly, for this year. And when calculating revenues, the amended forecast is taken into account, This means higher non-oil and gas revenues, and in accordance with the rule, the government has the opportunity to propose increasing expenditures to increase non-oil and gas revenues," Kolychev said, noting that changes in the expenditure side will mainly affect the measures outlined by the President in his address.

The deputy minister did not announce specific numbers with regard to the changes, advising reporters to wait for the government to approve the amendments. Meanwhile, he emphasized that the structural deficit, determined by basic oil and gas revenues, will remain the same.

The overall deficit, whose change is affected by the dynamics of oil and gas revenues, which, in turn, depend on oil prices and the ruble exchange rate, will "not be significantly" higher, Kolychev said. Because the forecast for oil and gas revenues was lowered, "the overall deficit may be higher than what is now in the law in absolute terms in rubles, but as a percentage of GDP, perhaps not," the deputy minister said.

"The forecast also takes changes [in oil and gas revenues] into account, and they, in my opinion, amount to less than what is approved in the law," he said, explaining that the forecast for oil and gas revenues was not significantly reduced, and therefore the size of the deficit will increase slightly.

"The budget affects the economy in terms of the structural deficit, and the structural deficit is not changing at all, so there is no point in talking about the impact here at all. The overall deficit depends solely on oil and gas revenues. If they decrease, in accordance with the law, it simply means that the replenishment with additional oil and gas revenues from the National Wealth Fund will be less than provided for in the law," the deputy minister said.