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1/ The Russian government has already spent a third of its budget for 2023 amidst a record level of spending and a collapse in oil and gas revenues, according to Russian economists. The government will need to make a 40% cut in daily spending to meet its annual budget. ⬇️
2/ The independent Russian media outlet Agency News reports that by 17 April, the Russian government had already spent 10.14 trillion rubles ($124 bn) out of a planned 29.88 trillion ($365.4 bn), according to the government's own published data.
3/ During the same period the government received only 5.4 trillion ($66 bn) rubles in revenue. The budget deficit increased by 4.7 trillion ($57.4 bn). This represents a 21% drop in revenue compared to last year, and reflects a 45% decrease in income from oil and gas exports.
4/ Spending increased sharply in April. 1/14 of the entire annual budget, or 2.1 trillion rubles, was spent in the first 17 days of April – 122 billion rubles per day, compared to 97 billion per day in January, 98 billion per day in February and 75 billion per day in March.
5/ To meet the planned budget, expenditure needs to be reduced by 40% to only 76.4 billion rubles a day for the rest of the year. This, as economic analysts note, is hardly possible. The current level of expenditure also risks an increase in inflation.
6/ Agency News notes that a third of the entire Russian federal budget for the year to date has been classified as secret. Classified spending has become the largest item in the budget, overtaking spending on social services and welfare.
7/ It's likely that this secret spending reflects the cost of the war in Ukraine, including increased military spending and the cost of maintaining the territories Russia is occupying in Ukraine.
8/ The Ministry of Finance is reported to be seeking a one-off "emergency tax" on large businesses, amounting to about 200-250 billion rubles ($2.44-3 bn), to reduce the budget deficit. It will probably get its way, but at the cost of worsening Russia's economy.
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