A Year of a Pandemic: the State of the Russian Budget System

Abstract

In the first quarter of 2021 against the background of a slight recovery in economic activity and a continuing downward trend in real household incomes the RF consolidated budget revenues grew not only in nominal terms, but also in real terms compared to last year. The most active growth in real terms was demonstrated by tax revenues and VAT. Income taxes and social insurance payments related to the income of the population are significantly behind the rate of inflation. The formed positive trend in world oil prices, however, does not yet provide access to the level of last year’s oil and gas revenues of the federal budget. At the same time, the outstripping growth of non-oil and gas revenues, even with the increase in the total volume of federal budget expenditures above the rate of inflation, ensured the final positive balance of both the federal budget and the consolidated budget. In the first quarter of the year, spending on the national economy grew at a faster pace. The growth rate of social policy expenditures remains high. Sub-federal budget revenues also showed a pronounced upward trend, mainly due to federal transfers. There is a certain shift in emphasis from their non-target types to their target ones. Although the expenditures of the sub-federal budgets increased in real terms, the balance of the consolidated budgets remained positive. Nevertheless, in a number of regions, there is a budget deficit with a significant amount of deficit financing of expenditures. The values of the state subfederal debt decreased slightly, while the total amount of the country’s state internal debt increased significantly.