ALEXANDER DERYUGIN: “THE GOVERNMENT ITSELF WILL BE AMENDING THE DRAFT BUDGET PROCEEDING FROM NEW PRIORITIES

The State Duma Committee on Budget and Taxes has started to consider amendments to the second reading of the federal draft budget for the next three years. A larger portion of these amendments (520 amendments) envisages the redistribution of Rb1.9 trillion: Rb750bn in 2023, Rb650bn in in 2024 and Rb500bn in 2025, follows from the government’s amendments.

According to Alexander Deryugin, the sum of Rb1.9 trillion is a large volume of redistributed funds. “The rounded amounts – Rb750bn, Rb650bn and Rb500bn – are most likely to be notional and they are going to be changed because the actual planning horizon is just a few months. The situation is changing and the priorities have to be adjusted. The situation will require to redistribute the funds,” Alexander Deryugin said.

“I think that the amendments which are currently introduced into the draft budget can be substantiated by a change in the situation relative to the period when this document was prepared. The main parameters of the budget were developed long before it was submitted to the State Duma and the situation has changed by the time of the second reading. So, the draft budget needs adjusting and this process will be going on. It is likely that amendments, including adjustments of macroeconomic indicators, will be made early next year. You may ask why? Because Russia faces oil price caps which western countries are going to introduce in December. Further, they intend to introduce price caps on petrochemicals in February. Let’s see how Russia will be going through these restrictions, adjust itself to them, what alternative markets it will find and what actual average prices for Russian commodities will be like.

All these factors will make us adjust both the revenue side and the expenditure side of the budget. So, it really does not make sense to say that a large redistribution of funds is something unique. It will continue in future, too, because it is a three-year budget and nobody cannot forecast anything precisely now even for one year for objective reasons.

The government will be amending the draft budget without waiting for the State Duma to do it. It is already clear that there will be lots of amendments and the government has been entrusted with broader powers to introduce amendments to the budget without amending the law on budget, otherwise, this law will have to be rewritten all the time.

With additional powers granted to adjust budget parameters, the government will be able to work without delays. All these changes have been brought about by external factors and the extent of adjustments depends on them. If we do not adjust and amend the budgets to our current needs, it will be ineffective. We have to adapt to the current situation.”