19 Jul 2023 15:48

Budget spending in 2024 will exceed existing three-year budget plan - Siluanov

MOSCOW. July 19 (Interfax) - The Russian Finance Ministry is expecting to overfulfill its plan for non-oil and gas revenues in 2023 and 2024, while spending next year will also exceed the level currently indicated in the law on the budget for a three-year period, and the amount is now under discussion, Russian Finance Minister Anton Siluanov told reporters.

"They can [exceed it], and they will. We are discussing [the spending increase] in the government now. We have better macroeconomics now. We see that this year will be better in terms of income, and that it will be better next year, therefore, spending will increase," he said, answering the question whether budget expenditures next year can exceed the amount now indicated in the budget law for 2023 and the planning period for 2024-2025 of 29.433 trillion rubles.

Commenting on the possible amount of spending over that amount, Siluanov said that "the government has not yet discussed all the proposals for an increase."

Meanwhile, a "rather significant" increase is expected "in non-oil and gas revenues this year and next," Siluanov said. The total amount of any spending increase will depend "first and foremost" on exceeding the plan for income, he said.

There are also plans to redistribute about 450 billion rubles of budget expenditures next year, Siluanov said.

As to whether a deviation from the current parameters in terms of the 2024 deficit level (1.4% of GDP in the current three-year budget law) can be expected, the minister said, "We are discussing the parameters based on the tasks that will be set for next year."

Earlier, Siluanov said that in 2023, there could be small deviations of the federal budget deficit from the planned level of 2% of GDP, in either direction.

"The economy is mobile; the deficit can also change a little. But this is both in one direction or the other," he said, noting that this year he does not see any special risks for the fulfillment of budget obligations. "In general, we will reach our planned targets," he said.

Regarding the formation of the budget for the next three years, the minister noted that additional funds would be required. "Now we are working just within the government, working out our tasks for mobilizing resources together with our colleagues in the government. Yes, money will be required," he said.

In June, Siluanov spoke about the need to raise funds for new state priorities within the budget. There is nowhere to increase spending, taxes or the deficit, he said.

Public debt will increase in light of the increase in budget spending, Deputy Finance Minister Irina Okladnikova said on Tuesday.

"We now have a debt level of 22.8 trillion rubles, which is 14.9% of GDP. This is our safe border for now. Although we understand that in the current situation, we will increase the debt; this is a hopeless situation, but we have to do it. Our spending is increasing, and we need to support the economy, we need to support the military area, and our four new regions need significant support. Therefore, we will increase the debt, but we will try to stay within safe borders," she said.

According to the latest Finance Ministry data, non-oil and gas revenues increased in H1 by 17.8% YoY to 8.999 trillion rubles. There is a decidedly positive trend in receipts of turnover taxes and income tax, even reaching the level of 2021.

In total, the volume and trajectory of non-oil and gas revenues indicate a significant excess when compared to the trend in the current budget law, the Ministry of Finance noted.

In H1, preliminary Finance Ministry data show that the budget was executed with a deficit of 2.595 trillion rubles vs. a target of 2.9 trillion rubles. According to the Electronic Budget portal, as of July 15, Russian budget revenues totaled 12.664 trillion rubles, while expenses were 16.2067 trillion rubles, resulting in a deficit of 3.5427 trillion rubles.