Mikhail Mishustin: “We are planning the budget policy in line with the fiscal rule. It should help us protect the economy from external risks. Additionally, in 2023 and 2024, we will plan a transition period during which expenses will be higher, by 2.9 trillion and 1.6 trillion roubles, respectively. This measure should gradually alleviate the budget deficit.”
Mikhail Mishustin’s opening remarks:
Good afternoon, colleagues.
We are finishing work on the draft federal budget for three years. Today we will discuss the entire package of documents that the Government will submit to the State Duma along with the country’s main financial law. It comprises a socioeconomic development forecast, the main aspects of the budgeting, taxation and customs tariff policies, as well as the budgets for two public non-budgetary funds.
The Government has discussed all key aspects as specifically as possible during the preparation stage. Proposals from deputy prime ministers, ministers and government agencies were reviewed during a working meeting at the Finance Ministry. Yesterday, a draft budget with the primary parameters and a forecast was submitted to the President. Major challenges and potential risks for the economy were taken into consideration.
The President noted the importance of pursuing stability and balance. This is necessary for dealing with the modernisation of the economy and the social sphere confidently and consistently, as well as for strengthening infrastructure, assisting the regions and addressing other essential aspects of the country’s development.
Also, yesterday, the main proposals on additional budget revenue were discussed at a meeting of the State Duma Committee on Budgeting and Taxation. Additional revenue will allow mobilising resources for domestic production while maintaining a satisfactory level of cost-effectiveness for industries and preserving a source of investment for businesses.
I would like to thank the committee representative and chair Andrei Makarov for the tremendous effort taken while drafting Russia’s primary fiscal document.
The funds allocated in the draft budget are supposed to help with tackling current and strategic objectives. They include further adjustments to the economy in response to the unprecedented external sanctions.
In these conditions, it is extremely important to support our citizens by fulfilling socially important programmes, facilitating further development and revamping many business and industrial projects and steering them towards stronger technological independence, new markets, partners, and modified logistics and supply chains.
At the same time, it is important to make progress with the strategically important projects that will help us achieve the national development goals set by the President.
I will briefly speak about the key parameters.
We estimate next year’s budget revenue at 26 trillion roubles, including all proposals on additional revenue that we explored at the President’s instruction.
Expenses are estimated at 29 trillion. The budget deficit will account for 2 percent of GDP, or 3 trillion roubles in raw numbers. We plan to primarily use loans to close the gap. Last week, the Finance Ministry issued nine-year federal loan bonds. The resulting demand exceeded supply by almost 150 percent, allowing us to keep moving forward.
With this approach, we will not have to use the money from the National Wealth Fund and it ensures that the national debt will remain at a proper level.
We are planning the budget policy in line with the fiscal rule. It should help us protect the economy from external risks. Additionally, in 2023 and 2024, we will plan a transition period during which expenses will be higher, by 2.9 trillion and 1.6 trillion roubles, respectively. This measure should gradually alleviate the budget deficit from 2 percent of GDP in 2023 to 1.4 percent in 2024 and 0.7 percent in 2025.
This approach is our way to more actively support the economy during the period of adjustment and restructuring economic links, on the one hand. On the other hand, it will contribute to sustainable development and structural changes in the mid-term and preserving trust in the Government’s macroeconomic policy.
We do not have too much time to finish up all the documents. They will be reviewed at a Government meeting the day after tomorrow. Therefore, today we need to make decisions on the dividing issues and reach unanimity.