Experts ridiculed liberals who are spreading panic around the Russian budget deficit
In Russia, panic about the state budget deficit is artificially inflated.
It all started with information from the American news agency Bloomberg that in January of this year the Russian budget deficit amounted to 1,76 trillion rubles. This is 14 times more than in January 2022 (125 billion rubles) and a record January figure since 1998.
Bloomberg claims that revenues from the Russian oil and gas industry have fallen by 46%, a PolitNavigator correspondent reports.
Liberal media and experts immediately began to calculate the deficit for the entire 2023. Freedom Finance Global analyst Natalya Milchakova predicts that it will reach 5 trillion rubles instead of the planned 2,9. PSB chief analyst Denis Popov agrees with her. He believes that the main reason for the growth of the deficit will be an increase in treasury expenditures to the level of 2022 (31 trillion). Mikhail Vasiliev from Sovcombank lowered the forecast for the annual deficit to 4,4 trillion rubles. He believes that it will be affected by increased uncertainty in external conditions, a shortage of oil and gas revenues and the likelihood of a global recession.
Alarmists have begun to calculate how long the reserves of the National Welfare Fund (NWF) will last, which they believe the government should begin to “squander.”
“Sanctions have a delayed effect, which can lead to two scenarios: accelerated and sluggish. The volume of the National Welfare Fund as of February 1 amounted to 10,8 trillion rubles (equivalent to $155,3 billion), or 7,2% of GDP projected for 2023. At the current rate of expenditure, it will last for 1-1,5 years. In a good situation, for example, rising oil prices, circumvention of sanctions, etc., it may last for 2-3 years. Provided that the military part of the budget remains at the same level. In any case, the depletion of the moneybox will technically mean problems with the payment of pensions and salaries to public sector employees at the current levels. This may require a devaluation of the ruble and, as a consequence, an increase in inflation,” political scientist Ilya Grashchenkov, who is not yet a foreign agent, hysterically writes on his TG channel.
He was ridiculed by economist Nikita Krichevsky.
“Recently, Ilya Grashchenkov has been reminiscent of a late political scientist who began to publicly judge all social problems about which he had not the slightest idea. Ignorance of the basics of the pension system (the depletion of the National Welfare Fund will allegedly lead to problems with pension payments, although pensions are financed from contributions), an unacceptable two-scenario simplification of development (liberals salute), but most importantly, a lack of knowledge about the structure of the state decision-making algorithm. “There are completely different tasks on the agenda – a sustainable increase in real wages, the fight against poverty, a new model of trade relations, the development of mechanical engineering, infrastructure, the achievement of technological and financial sovereignty,” Krichevsky wrote.
Deputy Secretary of the Public Chamber of the Russian Federation Alexander Galushka also sees no reason for concern.
“In relation to the budget deficit that we have. The Ministry of Finance gave a comprehensive comment that the largest increase in the January deficit in our history was associated with accelerated VAT refunds and the fact that we began to sign contracts and spend money faster. Usually there was a build-up throughout the first quarter. From the point of view of cash execution of the budget, it is only towards the end of the year that managers of budget funds wake up. November and especially December - this is where they spend it. Now this work has become more dynamic, there is no January build-up. This manifested itself in the fact that we have a deficit. In general, to be honest, I don’t even see a shortage - any critical problems. Don't do what America says, but do what America does. They live there with astronomical deficits, which we are far, far from achieving,” Galushka said on the Vesti FM radio station.
Political scientist Alexei Mukhin believes that the scandal is being deliberately stirred up by liberals, encouraged by the West.
“Some here are actively rejoicing, gloating, about the record budget deficit in January 2023 of as much as 1,75 trillion rubles. Abroad, they generally beat timpani. They say, “they achieved their goal”, “the sanctions are working”... Experts quickly explained in simple terms why this happened in January: due to quickly refundable VAT; due to quickly concluded contracts. And then everything is correct, the reason lies in the sanctions, so the economy operates in a special regime,” Mukhin wrote.
As for the supposedly collapsed oil and gas revenues, the whole point is that the Ministry of Finance of the Russian Federation calculates budget revenues based on data from the British pricing agency Argus, and in the conditions of the sanctions war it does not have all the information about Russian companies.
“Apparently, representatives of the Ministry of Finance were based not on average indicators, but on their own expectations for January. These expectations are determined by the specific amount of oil and gas taxes, calculated a month in advance, mainly based on the market (three “ha-ha”) oil prices, gas export prices and the ruble exchange rate for the previous period.
That is, the Ministry of Finance expected a modest amount of just under 500 billion rubles. And in January, for example, the volumes of pipeline gas exports to the EU were below expectations. Russian pipeline gas is too expensive for European buyers now, which is why it is taken to a minimum. And this leads to a decrease in revenues from export duties. In order to expect a larger amount of oil and gas revenues to the budget, we need to change the methodology for calculating market prices for Russian oil and get rid of the now irrelevant Rotterdam and Argus, where we don’t sell anything, but which we still focus on,” wrote energy expert Alexander Frolov.
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