The federal budget surplus narrows in 3M23 as revenues exceed expenditures in March

RUSSIA ECONOMICS - In Brief 10 Apr 2023 by Alexander Kudrin
The Finance Ministry reported that in 3M23, the federal budget deficit narrowed compared to 2M22 and accounted for R2.4trln (versus R2.6trln a month ago). It means the budget was in surplus of about R200bn in March alone. Tax collection improved last month as the government collected R688bn of the oil and gas taxes. In 3M23, oil-and-gas taxes accounted for over R1.6trln. The non-oil-and-gas taxes exceeded R1.8trln in March and R4.0trln in 3M23. It seems it won’t be difficult for the government to collect about R2.5trln of monthly taxes for the rest of the year.Expenditures in 3M23 reached R8.1trln as they stayed at R2.3trln in March alone. In January and February, the federal budget monthly spending was higher. Meanwhile, the 2023 expenditure target is R29.1trln (while the government plans to collect R26.1tln of revenues). To reach the target, the Finance Ministry should spend about R2.3trln per month, i.e., the same as in March. Therefore, one cannot rule out that the federal budget deficit in 2023 will be lower than planned - assuming other factors are equal and tax collection remains stable (the ongoing healthy depreciation of the ruble will help). Evgeny Gavrilenkov Alexander Kudrin

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