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The federal budget of Russia (Russian: федеральный бюджет России) is the leading element of the budget system of Russia. It is a major state financial plan for the fiscal year, which has the force of law after its approval by the Russian parliament and signed into law by the President of Russia.
The federal budget is the primary means of redistribution of national income and gross domestic product through it mobilized the financial resources necessary to regulate the country's economic development, social policy and the strengthening of the national defense. The share of federal budget accounts for a significant portion of the distribution process, which is the allocation of funds between sectors of the economy, manufacturing and industrial areas, regions of the country.
The right of the Russian Federation for an independent federal budget is enshrined by Article 71 of the Russian Constitution and the Budget Code of Russia that regulates the details of its formation and execution.
Process
No later than October 1, the Russian government prepares and introduces a draft federal budget for the next fiscal year to the State Duma.
The federal budget is considered by the State Duma in three readings (amendments to the Code). At first reading, the basic parameters of the budget are adopted. According to the Budget Code, during the first reading of the State Duma has the right to increase revenues and the federal budget deficit, if these changes are not the endorsement of the government. The State Duma can reject the draft budget. In this case, a conciliation commission in conjunction with the government. In the second reading of the State Duma approves the budget section by section, and the third is on the budget law as a whole. Following the adoption of the State Duma the federal budget, the law goes to the Federation Council, the upper house of the parliament, and then signed into law by the President.
Structure
Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short-term borrowing to finance budget deficits led to a serious financial crisis in 1998. The Russian economy bounced back quickly from the 1998 crisis and enjoyed over 9 years of sustained growth averaging about 7% due to a devalued ruble, implementation of key economic reforms (taxation, banking, labor and land codes), tight fiscal policy, and favorable commodities prices.
Data by decade
2000–2009
Russia ran a budget surplus from 2001 to 2008 when a financial crisis occurred.
Although the government revised its budget projections during 2009 to reflect lower oil prices and the effects of the economic crisis, it ended the year with a budget deficit amounting to 7.9% of GDP, which it financed from the Reserve Fund, one of the government's two stabilization funds. The government's anti-crisis package in 2008 and 2009 amounted to about 6.7% of GDP, according to World Bank estimates. The package provided support to the financial sector and enterprises through liquidity injections to banks and tax cuts/fiscal support to enterprises as well as modest support for households and small and medium enterprises and increased unemployment benefits.
The highest rate of increased fiscal revenues associated with the production and export of mineral resources (tax on mineral extraction, oil export duties, etc.). In particular, the 2008 federal budget of Russia was formed on 50% oil and gas revenues (in 2006 the share of oil and gas revenues accounted for more than half, in 2003 it accounted for a quarter of the total income).
2010–2019
In 2016, the Russian budget deficit reached $21 billion. It was expected to rise to $21.7 billion in the year. 2016 budget revenues were estimated to be 13.7 trillion rubles (200 billion US dollars) or 17.5% of GDP, while spending is planned to be 16 trillion rubles (roughly 233 billion dollars) or 20.5% of GDP. The budget deficit is thus 2.35 trillion rubles (33 billion dollars) or 3% of GDP.
2020–present
In 2021 the budget was set:
- 2022 Revenues 25.2 trillion rubles ($341 billion). Expenses 23.6 trillion rubles ($325.8 billion). Surplus 1.4 trillion rubles ($15.2 billion)
- 2023 Revenues 25.5 trillion rubles ($349 billion). Expenses 25.1 trillion rubles ($343 billion). Surplus 0.4 trillion rubles ($5.9 billion)
- 2024 Revenues 25.8 trillion rubles ($352 billion). Expenses 26.1 trillion rubles ($357 billion). Deficit 0.3 trillion rubles ($4.3 billion)
As of autumn 2022 Russia was estimated to possess nearly $549 billion in foreign exchange reserves, but some 50% of that total has been frozen by foreign countries friendly to Ukraine. In 2021, the federal budget totalled to $340 billion. As a result of the international sanctions during the Russo-Ukrainian War, budgetary shortfalls would normally need to be covered by the Russian National Wealth Fund, said Finance Minister Anton Siluanov.
Since the start of the Russian invasion of Ukraine, the Russian government has concealed its actual spending figures. The last reliable data we have from Russia goes back to 2021 which showed nearly 50 trillion Rubles in spending. In 2023 the Russian finance minister stated that the planned surplus of 1.4 trillion rubles from the 2022 budget had become a 3.3 trillion ruble deficit over the same period. In addition, the Russian finance minister reported in April that the deficit in the first quarter of 2023 was 2.4 trillion against the expected yearly surplus of 0.4 trillion rubles. Alex Isakov forecasts the 2023 expenditures to be 31 trillion rubles, with a deficit of 6.9 trillion. The declared results to June 2023 shows a budget deficit of 2.59 trillion rubles ($28 billion).
More than 20 million people in Russia (14 percent of the population) live below the poverty line, and the invasion of Ukraine is prioritized ahead of education, health care, infrastructure, social payments and highways, railroads, bridges, airports, and other basic infrastructure. By the end of 2023, Vladimir Putin planned to spend almost 30% of public expenditures on defense and security.
See also
References
- "Russia's Budget Deficit to Reach $21Bln in 2016 – Finance Ministry". The Moscow Times. Retrieved 30 May 2016.
- "Бюджет России на 2016 год. Инфографика". AiF. 25 December 2015. Retrieved 10 May 2023.
- "Cabinet approves draft budget for 2022-2024 — Cabinet's telegram channel". 21 September 2021.
- Berman, Ilan (30 November 2022). "The real costs of Russia's Ukraine war". NEXSTAR MEDIA INC. THE HILL.
- "Russia Set To Post A Massive $55 Billion Budget Deficit In December". Yahoo. OilPrice.com. 14 December 2022.
- "Roskazna". Archived from the original on 2020-10-10. Retrieved 2023-03-23.
- Nechepurenko, Ivan (10 January 2023). "Russia posts a $47 billion budget deficit for 2022, its second highest in the post-Soviet era". The New York Times.
- "Russia's Finance Ministry reports first quarter budget deficit of 2.4 trillion rubles".
- "Budget off to the front - Russia's budget was short 1.7 trillion rubles in January. Still, there are enough funds for 'a couple years of war', Novaya-Europe's source says".
- "Russia's budget deficit hits $28 bn". 8 July 2023.
- Rustamova, Farida; Tovkailo, Maxim (28 September 2022). "Putin Can Afford at Least Two More Years of War". The Wilson Center.
- "Putin approves big military spending hikes for Russia's budget". Reuters. 27 November 2023.
This article incorporates public domain material from U.S. Bilateral Relations Fact Sheets. United States Department of State.
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