In his interview with the Izvestia daily, Alexander Deryugin, Researcher of the Budget Policy Department of the Gaidar Institute has explained why the Ministry of Finance faces a budget  deficit at year-end.
The federal budget revenues surpassed the expenditures by Rb138.4bn despite a forecasted deficit in 2022. According to the data of the Electronic Budget website, as of November 1, 2022 the budget revenues were equal to Rb22.1 trillion, while expenditures, to Rb21.9 trillion. At the same time, the RF Ministry of Finance expects a deficit of over Rb1.3 trillion or 0.9% of GDP. The Agency’s forecast is highly likely to materialize because the peak of spending takes always place in December, Alexander Deryugin notes. According to the expert, most investment payments are made at year-end, to say nothing of additional expenses related both with accession of new territories and the special military operation (SMO).

“The peak of expenses takes always place in December, so it is too early to rejoice in surplus budget. Normally, all capital and investment expenditures are made at the end of the year.   Generally, the higher the share of investments, the higher the peak of expenses in the last month," Alexander Deryugin says.  Uneven utilization of budget funds during a year is a serious issue which has existed for 30 years, the expert laments.   According to Alexander Deryugin, both the RF Ministry of Finance and the Central Bank of Russia are interested in solving it.  

The Central Bank of Russia seeks to prevent a rise in inflationary processes. With financial flows becoming more equal throughout a year cycle, it will be easier to manage them, the expert explains.  However, it is difficult to change that because expenditures cannot be easily carried over from one fiscal year to another, Alexander Deryugin added.  In Alexander Deryugin’s view, monetary authorities fear to modify this system. “If such freedom is granted to all budget funds managers, there is a risk of creating the whole host of problems related with delays and a lack of prompt decision-making,” Alexander Deryugin summed it up.