Russia had 2022 budget deficit of 3.3 trillion rubles or 2.3% of GDP - Siluanov

MOSCOW. Jan 10 (Interfax) - Russia had a federal budget deficit of tentatively 3.3 trillion rubles or 2.3% of GDP in 2022, Finance Minister Anton Siluanov said at a cabinet meeting.

A budget surplus of 1% GDP or 1.3 trillion rubles was originally planned for 2022 - there had been a surplus of 0.4% in 2021. The Finance Ministry later said there might be a deficit of 0.9% in 2022, increasing that forecast to 2% closer to the end of the year.

The Finance Ministry said the 2% estimate did not reflect budget spending on compensation for the deferment of insurance premiums. That compensation totaled 770 billion rubles or roughly 0.5% of GDP. So the deficit adjusted for that spending ought to have been 2.5% of GDP.

"We overshot our revenue target last year, the total was just under 28 trillion rubles, or 2.8 trillion rubles less than we planned. This was mainly due to oil and gas revenue, thanks to higher energy prices, as well as to growth in non-oil revenues, including higher VAT as the result of increased demand in certain periods of last year," Siluanov said on January 10.

Prime Minister Mikhail Mishustin, opening the meeting, said budget spending exceeded 31 trillion rubles.

"We used the windfall to finance the expenditure, and we borrowed more on the financial market. Our budget deficit increased as a result and totaled 3.3 trillion rubles or 2.3% of GDP, Siluanov said.

He said the deficit would have been 1.8% of GDP had it not been for the spending to compensate extra-budgetary funds for deferred insurance contributions. "That is, less than 2% of GDP, as we planned," Siluanov said.

Budget spending was 2.5% below target, "above recent years."

"We increased the volume of expenses, and that increase amounted to more than 6 trillion rubles. This money was earmarked primarily to support people. An unscheduled indexation for non-working pensioners by 10%, the subsistence level, the minimum wage. Almost 500 billion rubles were allocated for these purposes. Measures were taken to support the labor market, which made it possible to ensure the lowest unemployment level in recent years - 3.7%. New payments for children under 16 years old were financed - more than 400 billion rubles. We deferred the payment of insurance premiums for the second and third quarters - more than 770 billion rubles. Significant funds were allocated to subsidize interest rates on loans, so that entrepreneurs have access to borrowed funds," Siluanov said.

He said there was a consolidated regional budget surplus of 200 billion rubles and that 40 regions were in surplus while 45 were in deficit. Regional budget revenues were 7% above target at just over 19 trillion rubles. Residual balances amounted to almost 3 trillion rubles, and this will be a "good pillar" for the execution of regional budgets this year, the minister said.