Mikhail Mishustin: “We have the resources to put us back on the path of sustained growth after a certain adaptation period. To do so, we need to make sure that every rouble from the budget is spent effectively. Let met reiterate that we must and we will deliver on all our social commitments.”
Mikhail Mishustin’s opening remarks:
Good afternoon, colleagues,
We are holding yet another meeting on drafting the federal budget for 2023 and the planning period of 2024 and 2025. On Monday, we had an in-depth discussion on the principal provisions of the country’s main financial document during a meeting with the President.
This budget will have to deliver on quite an ambitious agenda. We will have to work against the backdrop of unprecedented external restrictions while global markets undergo monumental shifts. I would like to emphasise that we will meet all the social commitments that we have.
In fact, Western sanctions had two goals: to wreak immediate havoc on the Russian financial system and undermine our potential by disrupting economic ties and value chains.
We did not let them destabilise the Russian economy. By moving swiftly to carry out measures as per the instructions of the head of state, the Government and the Bank of Russia have maintained financial stability and helped reformat many projects, while supporting the most vulnerable categories, including both businesses and people.
GDP and investment statistics have exceeded our expectations. Unemployment is at an all-time low. Inflation is gradually decreasing. Most importantly, domestic demand is picking up, primarily consumer demand.
We need to reinforce these positive trends in the medium term. They are now at the core of the country’s socioeconomic development forecast, which serves as a starting point for drafting the federal budget for the next three-year cycle.
Of course, all the risks are still there. The collective West has not succeeded so far in its efforts to insulate our country from the global economy. The attempts to do so have resulted in skyrocketing global prices and caused anxiety regarding the upcoming winter. Still, it is clear that the effort to exclude us from our usual export markets will carry on.
We have to take this into consideration when planning for the future without forgetting about our own strategic objectives, primarily those set forth by the President as the national development goals.
We will continue working to adjust and restructure the Russian economy, and will focus on expanding our exports to friendly countries. We will also build value chains within the country and enhance our technological and economic sovereignty.
Taking this path will bring us more benefits in the medium and long term compared to sticking with the status quo. This gives us many opportunities to expand domestic manufacturing, attract capital to Russia’s jurisdiction, and also to strengthen our potential in research and technology.
The President set out the new budget priorities at the meeting. Let me remind you that they are aimed at advancing and implementing national projects in people’s interests. Other priorities are creating conditions for a structural reform, promoting economic growth, developing infrastructure in the regions, creating new jobs, and generally preserving macroeconomic stability and sustainability.
The decisions we will adopt today should ensure this both in terms of financing and earnings/spending.
Under the current conditions, it is particularly important to take a cautious approach to forecasting. Our estimates must not be based on unrealistic premises. New expenditure commitments ought to be approved based on the available potential rather than illusions.
Against this background, a cautious expansion of budget stimulation will make it possible to more rapidly reduce interest rates in the economy and therefore ensure the private sector’s development. Simultaneously, we should keep a tight rein on the growth of spending. This will help us to keep the budget balanced and avoid higher inflation and the loss of macroeconomic stability.
I am confident that our years-long experience and the foundation we have laid will enable us to cope with these tasks. We have enough resources to resume steady growth after a certain period of adaptation.
For this, each budget rouble should be spent with maximum efficiency. It is necessary to encourage business activity, on the one hand, and help people, primarily the most vulnerable groups, on the other. To reiterate: we must and we will deliver on all our social commitments.
There is not much time left to put the finishing touches on the draft budget. Today, we will analyse all the remaining discrepancies in the country’s main financial document.
Present here are my deputies and agency heads. It is necessary to complete the work on the entire budget package within a brief timeframe so that we can report about this to the President early next week, including about the implementation of his instructions. The next step is to submit it [the draft budget] to the Budget Commission for consideration and adopt it at a Government meeting.