Russia’s prime minister warned that risks to the economy persist and cautioned budget planners to temper optimism when drafting 2024–26 fiscal forecasts. The statements came as the government unveiled the 2024 draft federal budget and discussed planning for 2025 and 2026 during a formal session reported by a major news agency. The emphasis was on realism in evaluating the macroeconomic environment and the factors that could shape public finances, including lingering global imbalances and ongoing volatility in commodity markets. The takeaway was clear: prudent fiscal discipline must be balanced with funding for strategic priorities in a sustainable way, avoiding over-optimistic revenue projections or commitments that could undermine stability in the medium term even if near-term indicators appear favorable.
The discussion underscored that the budgeting process should account for all previously accumulated imbalances and potential external shocks. Developments in the world economy, currency movements, and external debt levels can influence budget outcomes, so forecasts should be grounded in these realities rather than wishful assumptions. The guidance promoted a pragmatic budgeting approach that prioritizes essential national needs, mitigates risks, and preserves room to maneuver in adverse scenarios. The aim is transparent, responsible policy making that safeguards public finances while supporting long-term priorities.
In addition, the prime minister emphasized caution when defining key budget features and entering into spending commitments. Officials were urged to scrutinize every line item, anticipate possible cost overruns, and ensure that long-term obligations do not outpace the nation’s capacity to fund them. The objective is credible budget mechanisms that can withstand shocks while continuing to fund core services and development projects. This stance reflects a balance between growth objectives and fiscal resilience, especially in a climate of global uncertainty.
A Bank of Russia survey released in September showed revised projections for the ruble’s path against the US dollar, with respondents adjusting expectations for 2023 through 2025. The forecast pointed to a weaker ruble, with estimates around 85.5 rubles per dollar for the current year, rising to about 89.9 rubles in 2024 and 90.8 rubles in 2025. Analysts had anticipated a gentler depreciation, and the revision signals a more cautious view on currency stability that could influence inflation expectations and import costs. The updated poll results emphasize how exchange rate movements intertwine with fiscal planning in shaping the broader macroeconomic landscape.
Earlier, market participants projected an exchange rate of roughly 81.8 rubles per dollar for 2023, with a similar level expected for the following two years. Inflation forecasts were upgraded, with expectations around 6.3 percent by year-end 2023, up from a prior projection of 5.7 percent. These shifts reflect evolving inflation dynamics and the impact of external factors on domestic prices, reinforcing the need for calibrated fiscal and monetary strategies that can adapt to changing conditions.
Previously, the central bank acted with urgency, raising the key rate to as high as 12 percent to curb inflation and anchor expectations amid heightened volatility in financial markets. This move illustrates the central bank’s willingness to adjust policy in response to evolving risks and to support macroeconomic stability during uncertain times. The development demonstrates a readiness to respond to shifting conditions and to safeguard stability in the economy.