ALEXANDER DERYUGIN: “UNEVEN EXPENDITURE DISTRIBUTION CREATES INCONVENIENCE IN PLANNING FOR THE REGIONS”

According to the Accounts Chamber, a third of federal budget expenditure will be executed in the fourth quarter. It stated that from 2015 through 2021, the volume of state treasury spending postponed until the last moment was on the rise. This year, the trend has changed, but just insignificantly. The RF Ministry of Finance has explained that budget spending becomes most active in December, because it is during that month that payments under government contracts should be made. However, this is regarded as a serious problem, since there are risks that the budget will fail to be executed.

Alexander Deryugin argues that the uneven expenditure execution creates inconvenience in planning for the regions, pointing out the fact that the revenue inflow follows a frequency pattern that is not in line with that of the execution of expenditure. Therefore, according to the expert, RF subjects are compelled to save money throughout the year in order to have enough of it for paying all their dues in December.

He went on to explain that in addition, an uneven expenditure distribution pattern creates a problem for the monetary authorities. Traditionally, the beginning of each year is marked by an inflation surge, and this is by no means always associated with the increased consumer activity during the New Year holidays. When money is sharply thrown into the economy in December, a significant part of it immediately goes into circulation and pushes up prices. The expert concluded that subsequently, the Central Bank will have to cope with significant jumps in the inflation rate.