Russian govt submits draft amendments to 2025 budget with deficit of 2.6% of GDP to State Duma

MOSCOW. Sept 29 (Interfax) - A bill on introducing amendments to the 2025 budget providing for an increase in the deficit from 1.7% of GDP to 2.6% of GDP has been submitted to the State Duma, with the text of the document and accompanying materials published in the Duma's database.

Initially, the budget law for the current year planned a deficit of 1.173 trillion rubles, or 0.5% of GDP. However, amendments were adopted in the spring, according to which the deficit was expected to be 3.792 trillion rubles, or 1.7% of GDP.

According to the updated parameters, the federal budget deficit in the current year will increase by 1.944 trillion rubles and will amount to 5.737 trillion rubles, or 2.6% of GDP.

The increase in the deficit's size corresponds to a reduction in the budget revenue estimate for the current year - by 1.944 trillion rubles, from 38.506 trillion rubles to 36.562 trillion rubles. Relative to GDP, the share of revenues will decrease by 0.6 percentage points due to an increase in the share of oil and gas revenues and a decrease in non-oil and gas revenues.

Oil and gas revenues are expected to amount to 8.654 trillion rubles (4% of GDP), which is 336.478 billion rubles more than the previously forecasted value. Baseline oil and gas revenues are estimated at 8.576 trillion rubles, 189.04 billion rubles less than the forecast. Thus, additional oil and gas revenues will amount to approximately 78.324 billion rubles in 2025.

Non-oil and gas revenues are reduced by 2.281 trillion rubles to 27.908 trillion rubles (12.8% of GDP), in particular as a result of a reduction in the forecast for VAT receipts by 1.187 trillion rubles to 14.519 trillion rubles, due to slowing economic dynamics, changes in the structure of the tax base in favor of tax-exempt consumption, a reduction in the value of imports and the share of imports subject to tax, and changes in the dynamics of the U.S. dollar exchange rate. Their reduction was also influenced, among other factors, by a decrease in forecasted corporate profit tax receipts by 171.715 billion rubles to 3.88 trillion rubles, a fall in receipts from personal income tax of 83.537 billion rubles to 774.664 billion rubles, a fall in receipts from the scrappage fee by 439.911 billion rubles to 1.123 trillion rubles, a decline in receipts from the excise tax on liquid steel by 16.5 billion rubles to 47.367 billion rubles, and a decline in receipts from the excise tax on gas (Blue Stream) by 46.447 billion rubles to 135.938 billion rubles.

Total expenditures in 2025 remain at the level of 42.3 trillion rubles or 19.5% of GDP. All changes in the expenditure part are related to the redistribution of budget allocations; in particular, an increase of 234.9 billion rubles in allocations for preferential mortgage programs and a decrease of 276.681 billion rubles in subsidies to Russian producers of wheeled vehicles and agricultural machinery are provided for.

The non-oil and gas deficit will increase by 2.281 trillion rubles and will amount to 14.390 trillion rubles (6.6% of GDP).

At the same time, state borrowing on the domestic market, which acts as a source of financing the budget deficit, is increasing, rising by 2.2 trillion rubles. Currently, the budget law provides for the placement of federal loan bonds (OFZ) in 2025 for 4.781 trillion rubles, with redemptions of 1.416 trillion rubles. Accordingly, net borrowing is expected to be 3.365 trillion rubles. OFZ placement is now planned to be increased to 6.981 trillion rubles. With the same redemption volume of 1.416 trillion rubles, net borrowing will increase to 5.565 trillion rubles.

Public debt will increase by 2 trillion rubles in 2025 to 38.553 trillion rubles.

The use of funds from the National Welfare Fund (NWF) for deficit financing is reduced from 447 billion rubles to approximately 600 million rubles, which was initially laid down before the spring amendments were introduced.

The size of the NWF will increase by 879.8 billion rubles in 2025, from 12.757 trillion rubles to 13.637 trillion rubles (or 6.3% of GDP), primarily due to a more favorable trajectory of oil and gas revenue inflows.