Russian federal budget spending in 2013-2014 might be reduced by cutting provisionally approved expenditures by 830 billion rubles (about $ 25 billion), Deputy Finance Minister Tatyana Nesterenko told reporters.
She said that under the new budget rule all provisionally approved expenditures for 2013 will be cut. Under the budget law for 2013, such spending is supposed to total 343.30 billion rubles next year. All these expenditures will now be cut. In addition, the government plans to cut 486.71 billion rubles of the 833.60 billion rubles in provisionally approved expenditures for 2014.
Nesterenko said budget revenues "are always calculated based on the macroeconomic price forecast for oil." The budget rule only applies to expenditures. The spending ceiling for the year is determined based on revenue at the base oil price, plus 1% of GDP. For 2013 this price is calculated as the average from 2008 through 2012, for 2014 as the average from 2008 through 2013, and subsequently the calculation period will increase to ten years.
"This is the absolute amount of expenditures, it is written into the budget and it cannot be exceeded. The budget rule does not make it possible to increase spending based on a revised, higher oil price forecast […]. If revenues are higher, this is a surplus or reduction of the deficit," Nesterenko said.
Therefore, Russia is targeting budget revenues of 12,395.4 billion rubles (18.8% of GDP) in 2013, spending of 13.387.3 billion rubles (20.3% of GDP) and a deficit of 991.9 billion rubles (1.5% of GDP). The non-oil and gas deficit in this case will be 6,623.9 billion rubles, or 10.1% of GDP.
In 2014, the government is planning revenues of 13,642.2 billion rubles (18.6% of GDP), spending of 14,101.9 billion rubles (19.2%) and a deficit of 459.7 billion rubles (0.6% of GDP); the non-oil and gas deficit is expected to be 6,534.8 billion rubles, or 8.9% of GDP. Provisionally approved expenditures for 2014 will total 388.9 billion rubles, or 2.8% of all spending.
In 2014, the government is planning revenues of 15,223.7 billion rubles (18.7% of GDP), spending of 15,316 billion rubles (18.8%) and a deficit of 92.3 billion rubles (0.1% of GDP); the non-oil and gas deficit is expected to be 7,005.5 billion rubles, or 8.6% of GDP. Provisionally approved expenditures for 2015 amount to 1,206.6 billion rubles, or 7.9% of all spending. The budget targets for 2015 are based on a base oil price of $94 per barrel.
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