Photo: Oleg Yakovlev / RBC
The expenditures of the Federal budget in 2017 will exceed spending last year, follows from the government’s amendments. The authorities decided not to miss an opportunity to increase spending to the presidential election, says expert
The expenditures of the Federal budget in 2017 will amount to 16.6 trillion rubles. — to 175 billion rubles more than last year, and 362 billion roubles more than stipulated by the law on the budget for this year, follows from the amendments that the government on Friday submitted to the state Duma. Thus, state expenditure, which initially should have been this year to decline by 1.1% in nominal terms.
In 2016, the budget was executed with a cost of 16.4 trillion in the next three years the Ministry of Finance planned to reduce them.
Expenses for year-end 2017 can be even more: with the changes in the so-called consolidated budget, the government expects to make expenditures on the level of 16.86 trillion rubles, follows from the accompanying materials sent to the Duma. It is still 257,5 billion rubles. to the current budget, but the government does not explain what is behind it. Unused appropriations 2016 amounted to RUB 220 billion, and they are to be used in the current year, said on 24 may, the Minister of Finance Anton Siluanov. The press service of the Ministry of Finance has not responded to a request to RBC on Friday night.
But even if the actual expenditure this year will amount to 16.9 trillion roubles, in real terms (taking into account annual inflation, estimated at 4%) they still would decline by about 1.5% compared to last year.
The budget deficit in 2017 will amount to 1.92 trillion rubles, or 2.1% of GDP, the draft budgetary amendments. For cost increases to 16.9 trillion the deficit is increased to 2.4% of GDP.
To increase the budget to allow additional revenues not related to oil and gas. The government expects to receive at 472 billion rubles more non-oil revenues than budgeted in the current budget, and to broadcast them to the increase in the total cost of 362 billion roubles (in the Budget code the expenditure during budget execution can be increased by an amount not exceeding the additional non-oil revenues). At the beginning of the year, the government agreed not to use extra revenues from oil and gas to increase the expenditure side: the Ministry of Finance buys them currency, which in 2018 will be transferred to the Reserve Fund.
The increase in revenues non-oil revenues is mostly attributable to growth in tax revenues (excise, VAT, income tax) “on the background of recovery in economic activity,” reads the explanatory note. At the same time, the government sees a risk that non-oil revenues will not meet the expectations — this account provides for the regulation of the possibility of additional use of 200 billion rubles from the national welfare Fund to Finance the budget deficit (excess of planned spending this money on 663,5 bn).
In mid-may, when the Ministry of Finance published the first version of the budget amendments for consideration, costs are proposed to increase to 315 billion rubles in comparison with the current law. But Siluanov promised to make additional edits, which will take into account the increase of Regardie in connection with the fulfillment of obligations to employees who transferred to Resguardo, as well as indexation of grants of the President in the field of culture and art. These appropriations will be funded from the 47 billion rubles., recently received “for repayment of debts of previous years, international treaties, Federal space Agency” (Roscosmos), follows from the explanatory notes.
About the risk of inflating costs contrary to the policy of austerity, experts said in November last year. The reason for this may be the weak consumer activity of Russians, which the authorities would like to support, pointed out analysts at Alfa Bank. The expectations of the Ministry of Finance is affected by the electoral cycle, says chief economist at Alfa Bank Natalia Orlova. President Vladimir Putin has proposed to index public sector wages, which are not subject to the may decree, she recalls. The rise will affect 5.8 million people, reported the Ministry of labor. However, it is a question of amendments to the budget in 2018 and 2019, which the Ministry of Finance has not yet been made.
“This is an additional risk that dominates the expenditure side, — said Orlov. To conclude from this that the Ministry of Finance refused from fiscal consolidation is not necessary. But it reduces the credibility of the review of Finance. Recent months, he said he was focused on tight fiscal policy, but in fact we see figures who deviate from these words.” The Ministry’s position “does not look very consistent” even given the fact that such changes it is making based on the wishes of the government and the President, she adds.
The Ministry of Finance will continue its cautious and conservative “politics of redistribution” of the budget, says Orlov. Social obligations will still be respected, but this will be offset by increasing the tax burden beyond 2018, he said. Now the budget is balanced at an oil price of $70-75, and the Finance Ministry need to reach at least $55-60, indicates Orlov (the average price of Urals oil in January–April was $51,84 per barrel). The government in the coming years will not increase the tax burden, repeatedly said Siluanov.