the liquid assets of the “extended” government (Federal government, regions and extrabudgetary funds) reached 17.7 trillion RUB at the beginning of spring 2020. It follows from the data of the Bank of Russia analysed RBC
Moscow-Live.ru / Akishin Vyacheslav Although to spend to support the economy, the government, for various reasons, and economists are urged to take measures to overcome the crisis including through adjustments of the budget rule and increasing domestic debt
Moscow-Live.ru / Budziszewski Nikolai
liquid assets “expanded” government (Federal government, regions and extra-budgetary funds) availablethe igali of 17.7 trillion at the beginning of spring 2020. It follows from the data of the Bank of Russia, RBC analyzed. Although to spend to support the economy, the government, for various reasons, and economists are urged to take measures to overcome the crisis including through adjustments of the budget rule and increasing domestic debt.
liquid assets of the Federal government ruble – and foreign currency deposits of the Federal authorities to the banks and the Central Bank – amounted to 15.3 trillion rubles as of March 1, 2020. In addition, the Bank accounts by March 1 lay of 2.4 trillion rubles of funds of the regional governments. Thus, liquid assets of the extended government (Federal government, regions and extrabudgetary funds) reached 17.7 trillion RUB at the beginning of spring (over 16% of GDP). The traditional leader among regions in terms of deposits – Moscow with 1 trillion rubles, followed by a large margin is Tyumen oblast (95 billion rubles at the beginning of 2020).
accumulated before the crisis, the liquidity of the Federal centre includes mainly foreign currency funds from the national welfare Fund (NWF) and the currency which the Ministry of Finance time to buy in early 2020 when oil prices are above $42.4 per barrel and ruble balances the Federal budget and the balances of extra-budgetary state funds. March cash reserves of Federal agencies in ruble terms could grow at least another $ 1.2 trillion RUB in connection with the weakening of the ruble.
On April 1, the volume of the liquid resources of the Fund held in accounts at the Central Bank, amounted to 11.1 trillion rubles., and excluding rubles earmarked for the purchase of shares of Sberbank – RUB 9.6 trillion ($123.5 billion). In addition, the accounts of the Central Bank lies 0,66 trillion rubles (about $10 billion) currency purchased by the Ministry of Finance for NWF in January-March 2020 but not yet credited to the Fund. In March the Central Bank began proactively selling the currency in the budgetary rules, selling 191 billion rubles, or $2.4 billion, and likelyOh, will deduct this amount from the funds of the Ministry of Finance. In addition, at the beginning of April the remains of means of the Federal budget amounted to 1.85 trillion, including $ 1.2 trillion in Bank deposits.
Despite the impressiveness of these amounts to spend their part to support the falling economy due to additional budget expenditures, the government can not. From 7 April, the Finance Ministry will sell foreign currency from the Fund, subject to a budget rule, it requires to buy the currency when the price of Russian oil exceeds $40, at constant prices, and sell when the price is below this level.
the proceeds from sales of foreign currency, offset the loss of oil revenues and allow you to keep budget expenditures at the planned level, but not to increase them. To waive the budget rule in its current form even in favor of the stimulus could cause market confidence to the rule will be lost.
in addition, reduction in income not from the sale of oil and gas (for example, at decrease in revenues from VAT or income tax) to compensate them will have other sources – mainly an additional hozaystvennih. To spend NWF reserves, more than the fiscal rule, will not work, and serve as a source of additional spending to stimulate the economy, they can’t. According to experts, to rescue the economy from the current crisis, we need additional budget expenditures financed from other sources of debt or the Bank of Russia.
In accordance with the budget rule total expenditure of the current year may be increased only by the amount of growth projected volume of non-oil revenues. Thus, from the entire set of stimuli can only increase the state guarantee on debt liabilities of the enterprises to issue loans and provide tax benefits, that part is already been done. And for the net increase in direct spending to stimulate the economy will need the suspension of budgetary governmentLa. Other features, like redistribution of budget balances last year or the increase in the deficit of regional budgets can be used is very limited and can lead to the growth of the “shadow” of the debt in the regions, which already faced in China.
According to experts, in 2020 the total amount of shortfall in budget revenues will amount to 3-4 trillion in oil prices of $25-35 per barrel relative to the initial budget plan at an average oil price of $57. While reducing General revenues by 3-4 trillion expected deficit of more than 3 trillion rubles will be able to close the sales of foreign currency from the Fund under the budget rule only 1.1-1.7 trillion rubles., the rest will have to cover borrowings. If the price of Urals of $30 per barrel, the expenditure of NWF reserves in the first nine months of 2020 will be from 0.6 to 1.2 trillion roubles.
in the fiscal rule of no reservations, which allow to temporarily deviate from the fiscal rule in the case of rare and extraordinary circumstances. Such reservations taken in countries such as Germany, Slovakia, Switzerland, Brazil and become an integral part of the modern budget rules. At the same time, experts note that the current fiscal rule in Russia looks like a Bastion of stability of the economy, and the Central Bank does not risk to go to unconventional monetary stimulus measures. At the same time, according to experts, countries in Europe have already started to ignore budget rules for struggle with the economic consequences of coronavirus, and the markets may not react to the retreat of Russia from the rules in an extraordinary moment.
with regard to Russian measures to fight the crisis, while they reserved only 1.4 trillion rubles, or about 1.3% of GDP. Anti-crisis measures mostly do not consist of direct new spending, and tax deferments, guarantees for loans companies, reducing insurance premiums for small businesses. The Central Bank also established a number of measures to small business lending.
At the same time, economists prizesby the government to increase fiscal incentives in comparison with other countries is quite small: the fiscal incentives of the Czech Republic to fight the pandemic are now 2% of GDP, the UK – 2.5% of GDP, Kazakhstan – 3.4% of GDP, Japan – 4.9% of GDP, Canada – 6% of GDP, Australia – 9.7% of GDP, the United States – 10.5% of GDP. According to them, no revision of the budget rules, the program incentives could reach about 2.4% of GDP.
the Head of the accounts chamber Aleksei Kudrin on 1 April suggested that the economy will need a package of state aid by value from 5% of GDP, or about 5.5 trillion rubles. To Finance part of the cost you can consider increasing the national debt by means of additional issue of government securities. If non-working days will have to renew or global recession will be deep, the business will need additional business support another 2-3% of GDP.
the Authorities are considering options of increasing the fiscal incentives above and beyond what the fiscal rule allows. This follows from the law on the suspension of certain provisions of the Budget code, signed by the President on 1 April. It the deputies allowed the government to increase total expenditure budget in 2020, the income of the Central Bank from the sale of Sberbank shares to the government, as well as the amount of additional revenue from “certain types of” non-oil revenues. This means that the government can increase spending to support the economy in the amount of growth of certain types of non-oil revenues, even if they will be reduced in 2020. A possible change in the future budget rules will allow to increase spending reserves.