Putin Signs ‘Most Complicated’ Budget in Recent Years

Putin Signs ‘Most Complicated’ Budget in Recent Years

Photo: http://ria.ru

Russian President Vladimir Putin has signed the law on the budget of the country for the next three years (2023 – 2025.) Earlier, this document had already been approved by the State Duma and the Federation Council.

This law, which is essentially the main financial document of the Russian Federation, is an estimate of revenues and expenditures in a number of areas. The new budget includes a large volume of various parameters: the volume of GDP, expenditures, revenues, inflation rate, the amount of domestic and foreign debt, the amount of the Development Fund and the National Welfare Fund, subsidies, as well as the amount of inter-budget transfers to the budgets of the RF subjects.

According to the official portal of legal information, the living wage in 2023 will be 14,375 rubles ($227.41.) The next year also provides for an increase in salaries for public sector employees and an increase in the minimum wage.

In addition, the new draft budget provides for payment of maternity capital, which amount for the first child will be about 580,000 rubles ($9,175.6) and about 780,000 rubles ($12,339.6) for the second. More than 14 million people will receive monthly payments: people with disabilities, Chernobyl victims, veterans, as well as soldiers who were in the zone of a special military operation.

3.5 trillion rubles ($55.37 bln) will be allocated to support low-income families with children, and over 300 billion rubles ($4.74 bln) will be allocated to the program to improve housing conditions for families with children. As for support of the cultural sphere, including the Russian cinematography, about 5.5 billion rubles ($87.01 mln) will be annually allocated for it.

The budget deficit in the coming year, according to the adopted document, will amount to 2.93 trillion rubles ($46.35 bln), which will be about 2% of the country's GDP. However, according to experts' calculations, in 2025, the deficit will drop to 1.26 trillion rubles ($19.93 bln), which would amount to just 0.7% of Russia's GDP.

According to the law on the budget, revenues will decrease by 5.6% compared to 2022, which will be associated, among other things, with the withdrawal of additional profits that oil and gas producing companies received this year.

In other words, all three years the country's budget will have a deficit, which, however, will gradually begin to decrease: as it follows from the document, it is planned to cover it by government borrowing.

It should be noted that the approved budget is primarily aimed at the structural restructuring of the economy and increasing the technological independence of Russia. Yes, it is formed with a deficit, but, nevertheless, it provides for the fulfillment of all social obligations of the state.

The State Duma reported that while crafting this document, experts were primarily guided by the forecast of Russia's socio-economic development for 2023-2025, a period when the Urals oil price is expected to drop from $80 per barrel in 2020 to $65 per barrel by 2025. The chances are there will be a moderate weakening of the Russian national currency to 72.2 rubles per dollar, with inflation set at 4% in 2024. As noted by Duma Speaker Vyacheslav Volodin, this budget is “the most complicated” in recent years.

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