"From the forest to the pine": covering the budget deficit this year will be more difficult due to falling oil prices

In April, the federal budget deficit increased by 1 trillion rubles and amounted to 3.2 trillion rubles, or 1.5% of GDP, by the end of four months, the Finance Ministry reported. The situation does not look critical if we focus solely on the figures and previous experience: during the same period last year, the shortfall in the state treasury approached 4 trillion rubles, and by December this amount had successfully decreased to 3.4 trillion. The problem is that today it is clearly more difficult for the state to cover the deficit - due to cheaper oil and, accordingly, a reduction in oil and gas revenues.

In fact, the Finance Ministry points to the factor of “weakening price conditions” as one of the two main reasons (the second is “advanced financing of expenses in January”). According to the calculations of the Ministry of Economic Development, in April, Russian Urals oil was traded at $54.8 per barrel, with the previously expected average annual price of $69.7.

Taking this circumstance into account, as well as due to the strengthened ruble, Siluanov's department proposed changing the projected budget parameters for the current year: revenues should be reduced to 38.5 trillion rubles (against 40.3 trillion), and the deficit should be tripled, to 3.79 trillion rubles (1.7% of GDP) instead of 1.17 trillion (0.5% of GDP). As expected, oil and gas revenues by the end of the year will decrease from 10.9 trillion to 8.3 trillion rubles. That is, by 2.6 trillion at once.

- The situation is causing some concern: the federal treasury deficit is already 1.5% of GDP, while by the end of the year it is calculated at 1.7% of GDP, and this amendment has been submitted to the government, - Nikita Maslennikov, a leading expert at the Center for Political Technologies, said in an interview with MK. - Yes, on the one hand, the first quarter traditionally sees advance payments on government contracts and state defense orders. And as a result, in the first months we get a greatly inflated deficit. Everything would be fine, but this year a powerful additional factor has emerged that is confusing all the cards - a lower price for oil than planned.

- According to the Finance Ministry's calculations, the decline in oil and gas revenues will be partly offset by growth in non-oil and gas revenues - by 0.8 trillion rubles, to 30.2 trillion rubles. What else?

- For example, privatization revenues in the amount of 100-150 billion rubles, if it goes as planned by the government. Of course, this is a trifle in the general picture. In general, money will come into the budget "from one pine tree to another", the volume of uncovered deficit will still be quite large. The other day, Siluanov held a briefing and answered many questions. But there are still some things left unsaid. In particular, the minister stated that the adjustment of federal budget parameters proposed by the Ministry of Finance will not require an increase in government borrowing. And that this year the department will spend 447 billion rubles "in net form" from the National Welfare Fund to cover the deficit. But this is not enough! What other sources are there? They are not entirely obvious yet, and we can only hope that at some point the price of oil will start to rise.

Another issue that has not been fully clarified concerns preferential mortgage programs: according to Siluanov, “despite all the budgetary pressures,” the costs of subsidizing them in 2025 will grow from the current 1.2 trillion rubles to 2 trillion rubles. But, again, I would like to understand where the money will come from. One can’t help but think about some “targeted” tax adjustments, about tightening fiscal legislation.

- According to the Finance Ministry, the National Welfare Fund ensures the stability of the budget system to fluctuations in oil prices. Today, the volume of its liquid part is about 3.2 trillion rubles, an amount comparable to the deficit. How does the state plan to replenish the National Welfare Fund?

- It's hard to say. Again, at the briefing, Siluanov said that the Ministry of Finance does not plan to change the cutoff price of oil under the budget rule. That is, it remains at $60 per barrel. But earlier, at the department's board meeting, the minister voiced an encouraging thesis, according to which the current model with a cutoff price of $60 "does not meet the challenges of the times" and requires fine-tuning - to maintain the stability of the budget system "under stressful developments in the oil market." It turns out that nothing has changed. Moreover, in conditions when the risk of a global recession looms on the horizon of the next 12 months.

News related to trade wars and negotiating tracks directly affect oil prices. The ninety-day US moratorium on tariffs expires in July, and even if events end in a compromise that suits everyone, global trade in goods will lose (according to WTO experts' forecasts) 0.2% of turnover. If the parties fail to reach a mutually acceptable solution, if China and other leading economies fail to reach an agreement with America, the losses will amount to 1.5%. The level of overall uncertainty is extremely high. It is no coincidence that the US Department of Energy has once again lowered its forecast for the price of Brent - to $65 per barrel this year, and to $57 next year. The likelihood of a stress scenario becoming a reality has not become any less. Against this background, we will again and again return to the issues of budget adjustments, the cutoff price for oil, sources of deficit financing, and budget impulse assessments.