Russia expects a budget deficit in December
2022.12.13 11:16
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Russia expects a budget deficit in December
Budrigannews.com – After a Gazprom-fueled rise pushed the surplus so far this year to approximately $9 billion, Russia’s monthly budget deficit could reach 3.5 trillion roubles ($55.38 billion) in December for the government to see an annual deficit of 2% of GDP as promised.
Russia ran a spending plan excess of 557 billion roubles ($8.81 billion) from January to November, the money service said on Monday, a more than fourfold leap from October.
Gazprom, a powerhouse, (MCX:) provided 1 trillion rubles in first-half dividends and mineral extraction tax (MET), accounting for almost 39% of revenues. Analysts stated that the gap in treasury funds could have reached 600 billion rubles without these funds.
To achieve its goal of 2% of GDP, the finance ministry will need to spend approximately 5-5.5 trillion roubles this month, which is more than twice as much as it spent in November. The spending on Russia’s budget typically rises toward the end of the year.
Evgeny Suvorov, an economist at CentroCreditBank, stated, “This means that the deficit could amount to 3.5 trillion in December.”
Russia has the capability to accomplish that. The public authority has been getting vigorously to fund its tactical mission in Ukraine and will give seriously drifting rate OFZ depository securities, well known among financial backers, on Wednesday.
In addition, in order to make up for the deficit, the ministry has used money from its emergency fund to the tune of 560 billion roubles.
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The Bank of Russia, which is expected to keep its key interest rate at 7.5 percent on Friday, has warned on multiple occasions that an increase in the deficit may necessitate tighter monetary policy, which could impede economic growth in the following year, when another deficit of 2% is anticipated.
According to analysts at Raifeissen Bank on Tuesday, “In our view, with increased uncertainty, the result could even exceed this level” due to sanctions pressure that may negatively influence revenue collection and/or the potential strengthening of fiscal stimulus in a recession.
Russia had anticipated a surplus of 1.33 trillion roubles, or 1% of GDP, in 2022 prior to launching what it calls a “special military operation” in Ukraine on February 24.
($1 = 63.2000 roubles)
