Russian Duma passes 2023-2025 draft budget at first reading

MOSCOW. Oct 26 (Interfax) - The State Duma or lower house of Russia's parliament passed the draft federal budget for 2023 and the 2024 and 2025 planning period at its first reading on Wednesday.

There will be budget deficit, which will be covered with internal borrowing and National Wealth Fund money.

Communist Party and A Just Russia Party representatives said during the reading that they would not back the draft.

The bill, No. 201614-8, was introduced to the parliament on September 28 together with tax innovations that would increase the mineral extraction tax burden, and with amendments to the Budget Code which establish a new procedure for determining baseline oil and gas revenue.

The draft budget projects GDP at 149.949 trillion rubles and December-on-December inflation at not more than 5.5% in 2023; and GDP of 159.714 trillion rubles in 2024 and 170.598 trillion rubles in 2025, with inflation not rising above 4% in either year.

Budget revenue will in 2023 will be to 26.130 trillion rubles, or 17.4% of GDP, and it will increase to 27.24 trillion rubles in 2024, or 17.1% of GDP, and 27.979 trillion rubles in 2025, or 16.4% of GDP. Oil and gas revenue will total 8.939 trillion rubles, or 6% of GDP, 8.656 trillion rubles, or 5.4% of GDP, and 8.489 trillion rubles, or 5% of GDP, in the respective years.

Expenditures in 2023 will be 29.056 trillion rubles, or 19.4% of GDP, and will grow to 29.433 trillion rubles or 18.4% of GDP in 2024 and 29.244 trillion rubles or 17.1% of GDP in 2025.

The deficit is expected to be 2.925 trillion rubles or 2% of GDP in 2023, and to decrease in 2024 to 2.192 trillion rubles, or 1.4% of GDP, and 1.264 trillion rubles in 2025, or 0.7% of GDP.

Public domestic debt is capped at 20.697 trillion rubles as of January 1, 2024, then 22.804 trillion rubles on January 1, 2025 and 24.994 trillion rubles on January 1, 2026.

The foreign debt ceiling is $66.6 billion or 63.4 billion euros as of January 1, 2024, then $68.1 billion or 63.1 billion euros on January 2, 2025 and $68 billion or 61.2 billion euros on January 1, 2026.

The National Wealth Fund will be 8.987 trillion rubles or 6% of GDP at the start of 2023, then 6.253 trillion rubles or 3.9% of GDP at the start of 2024 and 5.947 trillion rubles or 3.5% of GDP at the start of 2025.

Most federal budget revenue in 2023, 2024 and 2025 will be from value-added tax - 39.9%, 41.1% and 43.1% respectively; mineral extraction tax - 31.2%, 30.4% and 30%; and corporate profit tax - 6.2%, 6.7% and 7%.