Evgeny Goryunov, Head of the Monetary Policy Department at the Gaidar Institute commented for Nezavisimaya Gazeta on the possible expansion of government borrowing and changes to spending rules that the State Duma may consider.
According to Evgeny Goryunov, the current deficit is not yet cause for alarm, but it could affect the cost of money in the economy.
“An increase in borrowing means that actual budget revenues are falling short of the Ministry of Finance’s revenue targets, and spending cuts are not going smoothly either. However, this is not surprising given the slowdown in the Russian economy. For now, I would not draw conclusions about budget problems. Especially since May made a modest contribution to the budget deficit—about Rb200 bn. “Thus, by the end of the year, the deficit will most likely not exceed Rb7 trillion (if oil and gas revenues remain sufficiently high, the deficit will be below Rb6 trillion in 2026),” said Evgeny Goryunov.