Russian Finance Ministry Admits Budget Deficit

The Russian Ministry of Finance admitted that Russia will have an excess of expenditures of at least 1.6 trillion rubles by the end of 2022.

Russian Finance Minister Anton Siluanov said that all of Russia’s revenues will go to expenses but will still not be enough. 

Russian Prime Minister Mikhail Mishustin announced on Thursday that the Russian government will impose a one-year deferral of social security contributions to companies. Mishustin said that this move will benefit consumers in the third quarter and allow companies to upgrade their manufacturing and logistics capabilities.

The deferrals for the second and third quarters amounting to 1.1 trillion and 540 billion rubles respectively will require an increase in the budget deficit, Siluanov said.

Additional spending from the federal budget to state extra-budgetary funds will be implemented. According to Siluanov, the National Welfare Fund (NWF) will cover the shortfalls in income, including the deferrals for the second and third quarters. 

Siluanov said that the finance ministry is expecting additional expenses amounting to 4 trillion rubles despite an expected income of almost 3 trillion rubles from oil and gas revenues. “The difference will be financed from carry-over balances, our internal reserves, including the reserve fund, and redistribution,” the finance minister said.

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