Russian macro: Budget 2024—generous spending, revenue collection challenging but manageable
The 11M23 federal budget execution statistics confirmed that revenue flow remained stable, and in 2023, as a whole, will exceed not only the initial formally approved budget but also the amended one used as a base for the 2024 budgetary planning (although they didn’t differ much). The government will have no problem financing its expenditures in full this year as tax collection (mainly of non-oil-and-gas taxes) in December usually soars, and it will soar this year as well. As of 11M23, non-oil-and-gas taxes have already exceeded the annual target.
In 2024, the non-oil-and-gas revenue target looks achievable, albeit under certain conditions. The key question, however, is the 2024 oil-and-gas revenues. The government expects them to exceed R11.5 trln, which is to say that they should grow by about 26% compared to the expected 2023 total amount. Calculations and sensitivity analysis show that to meet the 2024 budgetary targets (i. e., planned expenditures, deficit, etc.) the ruble needs to be much weaker if we assume that the Urals oil price won’t deviate much from its current level. A weaker ruble would help collect more non-oil-and-gas taxes as well—particularly VAT and excises on imported goods accounting for over 20% of total federal budget revenues. To achieve that, the government will most likely decide to withdraw its recent regulations on obligatory FX sales by major exporters.
Now read on...
Register to sample a report