BOFIT Weekly Review 2016/18
Pressure on Russian government finances continues to increase
First-quarter revenues to the consolidated budget (federal, regional and municipal budgets plus state social funds) were down about 3 % from 1Q15. As inflation remained fairly high, the contraction in government revenues in real terms that began in 2015 persisted.
As in 2015, the revenue drop reflected lower oil & gas tax revenues, which were down 36 % y-o-y in the first quarter (down over 20 % for 2015 overall). Other revenues increased 8.5 % in nominal terms, basically matching the pace of inflation. Nominal spending declined slightly. The government deficit amounted to 2.8 % of GDP.
Federal budget revenues fell 15 % y-o-y even in nominal terms on the lower oil & gas tax revenues and weakness in other revenue streams. As regional budget revenues were essentially unchanged on-year in nominal terms, the real fall in revenues continued. Asset transfers from the federal level to regions continued to dwindle, while other regional revenues performed weakly. Federal budget expenditures fell sharply, due in part to a spending spree in early 2015. Regional budget spending has fallen in real terms since 2013, while growth of revenues of state social funds and their expenditures accelerated to over 20 % y-o-y in nominal terms.
Government revenues and expenditures
Source: Ministry of Finance.