In addition, the decrease in GDP in 2023 may not be the 1 percent predicted by the government but 3 percent: the crisis caused by the war is not sharp but is protracted. Each $10 per barrel decrease in the oil price deprives the government of about 1 trillion rubles in revenues. The official budget forecast includes an unrealistic oil price of $70 per barrel. Analysts from VTB Bank and the VEB investment company believe that the deficit will reach 4–4.5 trillion rubles. The budget deficit is 2.9 trillion rubles, but it was planned before the announcement of mobilization. Oil and gas revenues, according to the forecast of the MinFin, may decrease by 24 percent, from 11.7 trillion rubles to 8.9 trillion. In 2023 the budget situation will significantly worsen. Entrepreneurs have avoided dismissing employees amid declining sales by assigning them to part-time work and refusing New Year’s bonuses. Consumption of the cheapest products is growing. Consumers are saving money, visiting malls less often, and reducing spending on cafés and restaurants, which are then forced to close. The total assets of Russian billionaires have fallen by almost $94 billion since the start of the war. Instead of the expected 3 percent growth by the end of 2022, the economy will show a decline of about 3 percent (in the fourth quarter it may have reached 6–7 percent). Losses from the war are incurred not only by the Russian state. Therefore the regions are trying to shift the cost of outfitting the mobilized solders to the volunteers as much as possible. According to the Russian Central Bank forecast, the regional budgets will face a deficit at approximately the same level in 2023. The revenues of Murmansk and Krasnoyarsk oblasts and Khakassia, Chukotka, Dagestan, Lipetsk, and Kursk oblasts collapsed the most (by 40–67 percent). The regions here are in dire straits: metallurgists’ and coal miners' revenues have dropped significantly because of sanctions. Siberia, the Urals, and Central Russia have particularly serious budget problems. Budget revenues from income tax es and other non-oil-and-gas sources have been sharply reduced. Even during the COVID-19 pandemic, the total deficit sustained by the regional budgets did not exceed half this sum. The Russian Central Bank expects the final regional budget figures to show a deficit of 1.2 percent of GDP. Regional budgets are also experiencing great difficulties. The government is no longer trying to save some of the oil and gas revenues in the NWF, spending revenues from the price of oil below $62 (previously the cutoff threshold was $45). About 0.6 billion rubles from the National Welfare Fund (NWF) was spent to finance the deficit. There is nothing left of the surplus, which was about 1.5 trillion rubles at the beginning of the summer. In 2022, military expenditures may exceed 5 percent of GDP, the maximum since the collapse of the USSR.Īccording to Russian Ministry of Finance forecasts, in 2022 the deficit may reach 2 percent of GDP. This is only part of military spending, which in the Russian budget is disguised as spending on health care, education, pensions, industry, and so on. Though the actual execution of the budget after the start of the war was classified, it is likely that real spending on the war exceeded that level by September. Military spending in 2022 was anticipated to reach 3.5 trillion rubles. Russia’s expenditures on the war are rising rapidly. Careers, Fellowships, and Internships Open/Close.Wahba Institute for Strategic Competition.Science and Technology Innovation Program.Refugee and Forced Displacement Initiative.The Middle East and North Africa Workforce Development Initiative.Kissinger Institute on China and the United States.Nuclear Proliferation International History Project.North Korea International Documentation Project.Environmental Change and Security Program.Hyundai Motor-Korea Foundation Center for Korean History and Public Policy.
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