Coronavirus and oil for $20 will make the Russian budget deficit. In 2020, the amount of revenue the Federal Treasury will amount to 15.2 trillion, spending is 20.8 trillion roubles expected by the government. Thus, instead of an earlier planned surplus of 900 billion roubles, the state will face a “shortfall” in the $ 5.6 trillion. But it’s not so much of these highly conventional figures, as the unpredictability of the overall situation. It is impossible to calculate how much will eventually hurt the economy, and what money will need to overcome all the consequences of this unprecedented crisis.
According to Finance Minister Anton siluanova, the problem is that on the background of the pandemic shrink and shrink the whole sector – air transportation, tourism, small business. People stop buying cars and other durable goods. In addition, the Minister said, there is a risk of “serious shortfall of taxes and other non-oil and gas budget revenues.”
This reality, along with a factor of extremely low oil prices, at the root breaks the previously set financial parameters. There is no greater outwardly serene paintings that existed before March. Accordingly, the Federal budget for the years 2020-2022, who last officially corrected in the Feb, needs a complete redrawing. By the way, in the spring of the Ministry of Finance had to prepare his new version given the updated forecast of socio-economic development of economic development. However, the task is somehow shelved, and the story will be continued: Prime Minister Mikhail Mishustin has instructed first Deputy Prime Minister Andrei Belousov to prepare a report on optimization of budget expenditures.
“I see three risks for the budget, – said the head of the Center for structural research of the Ranepa Alexey Vedev. First – the decline in oil prices by more than two times, the second – a dramatic slowdown in the global economy, the third – the shortfall in Russian Treasury key taxes, because consumer confidence is at zero, collapsed, industrial production and the service sector. As for energy, we suffer losses not only due to low prices, but also because of reduced exports”.
meanwhile, the country’s budget – not only a balance between revenues and expenditures. Of course, it is good when these parts are balanced, but this is extremely rare. When there is a serious crisis – recession, pandemic or armed conflict, you have a budget in principle cannot be reduced to a zero deficit: the cost will always significantly exceed revenues, says investment Manager at “OTKRITIE Broker” Timur Nigmatullin. And if earlier the Ministry of Finance easily sought additional funds (to Finance expenditure) through borrowings in the West, now that damp��arnoga mechanism. Since international sanctions against Russia remain in force, we will not be able to issue Eurobonds in sufficient volume. Moreover, as President Putin has called for the introduction of tax rates on the bonds, the Russians will buy less. According to Nigmatullina, budget problems caused not only well-known force majeure. In many respects they were provoked by the authorities themselves taking wrong decisions and laws.
“I Think at the current level of oil prices, the deficit will amount to 2 trillion rubles, no more, – said a senior researcher at Institute for economic policy. Yegor Gaidar, Sergei Zhavoronkov. – Let me remind you that for the period 2014-2017, when oil was cheap, budget and at least halve, but the government has not experienced any particular problems from the point of view of costs. In the coming months they, too, will not.”
But what effect will the budget deficit to previously undertaken by the state social obligations? Still does, in 2020 they will be implemented, I’m sure the doctor of Economics (HSE) Sergei Smirnov. On the contrary, in the context of pandemic coronavirus the list of obligations has been supplemented with new, such as crisis payments in the amount of the minimum wage. However, look now at the more distant future, to understand what awaits social sphere on the horizon 2021-2024 years, will not work.
