ALEXANDER DERYUGIN: “THE RF FEDERAL BUDGET DEFICIT HIT Rb 1.52 TRILLION IN JANUARY-JULY”
Alexander Deryugin, researcher, Budget Policy Department at Gaidar Institute, commented the federal budget deficit for ‘Davydov.Index’ according to preliminary Minfin estimate hit Rb 1.52 trillion in January-July.
“Perhaps, some other measures designed to boost the economy will be taken and in that case the size of the deficit can also move up. Incidentally, it must be kept in mind that companies in the number of industries got tax exemptions and so far it is unclear what happens next. Now this exemption is in the form of tax payment and at the end of the year exemption will not be effective and companies (especially small business) will have to pay all taxes at once. I doubt that many of them will be able to fulfill all their obligations. I suppose that they will allow deferment of the payments or take additional decisions aimed at propping up businesses.
In my view, deficit at the year-end will be larger than now because there will be more spending than it was planned at the signing of the Budget Law. However, I do not think that this is crucial taking into consideration the reserves accumulated in the National Wealth Fund. Having such reserve, we cannot resort to large scale borrowings. Thus, I do not see a problem even if finally, the deficit will be over Rb 3 trillion. This is not dangerous for the budget.
Moreover, the oil prices are recovering at present. Of course, it is impossible to say that they are high but around $45 per barrel is close to the cut price. And if oil prices stay in the current range further on, then by the end of the year oil and gas revenues can increase, which will positively affect the budget balance. In brief, there are no significant problems there.”
In my view, deficit at the year-end will be larger than now because there will be more spending than it was planned at the signing of the Budget Law. However, I do not think that this is crucial taking into consideration the reserves accumulated in the National Wealth Fund. Having such reserve, we cannot resort to large scale borrowings. Thus, I do not see a problem even if finally, the deficit will be over Rb 3 trillion. This is not dangerous for the budget.
Moreover, the oil prices are recovering at present. Of course, it is impossible to say that they are high but around $45 per barrel is close to the cut price. And if oil prices stay in the current range further on, then by the end of the year oil and gas revenues can increase, which will positively affect the budget balance. In brief, there are no significant problems there.”