A possible increase in inflation in the Russian domestic market will be the main risk for the country this year. In the context of the sharp increase in government spending, the rise in consumer prices and the rise in government borrowing will be the only way to finance the federal budget against the backdrop of increased international sanctions. opens Words of Dmitry Alexandrov, managing director of Ivolga Capital, Izvestia newspaper.
According to the only portal of the budget system, as of February 20, federal budget expenditures amounted to 5.1 trillion rubles, which is almost 4 times the state revenues (1.3 trillion). The difference amounted to about 3.8 trillion rubles, a historical maximum stated in the note.
“It raises clear concerns that have already accumulated <….> Without a positive global situation, the only way to finance the budget would be increased government borrowing and inflation, which would reduce this debt. “I think the risk of rising inflation is the main risk for 2023,” he said.
According to him, the federal budget could be supported by relatively high oil prices in the range of $85-$90 per barrel of North Sea Brent, which would cause the price of the Russian Urals grade to rise to $65. However, at the moment, stock market quotes have not yet reached this “comfortable” level.
February 20 Telegram channel MMI knowledgeableAccording to data for mid-February 2023, budget expenditures of Russia since the beginning of the year amounted to 4.92 trillion rubles, and revenues – 951 billion rubles. Thus, a deficit of approximately 4 trillion rubles was created in the state budget of the Russian Federation.