Federal budget surplus is estimated at RUB 236.7bn (USD 7.1bn) or 0.6% of GDP in Jan-Jul, according to flash estimates by FinMin. In H1/13 federal budget deficit was estimated at RUB 306.88bn (USD 9.3bn) or 1% of GDP, which makes July’s deficit of about RUB 70bn vs. RUB 178bn surplus estimated in June. To compare, in Jan-July 2012 federal budget surplus amounted to RUB 282.6bn, dropping almost threefold y/y vs. RUB 756.3bn budget surplus seen in Jan-July 2011.

In Jan-Jul 2013 federal budget revenues stood at RUB 7.33tn (57% of target for 2013). Out of that oil and gas revenues were RUB 3.64tn.  Budget spending was RUB 7.09tn (53% of target for 2013). In 2013 the federal budget deficit is targeted at 0.8% of GDP. In 2012 federal budget was closed with RUB 12.8bn deficit of 0.02% of GDP.

Federal budget surplus of 1% of GDP in H1/13 is posted on the background of fiscal consolidation currently drafted by FinMin. It must be noted that budget spending usually soars abruptly in the fourth quarter of the year.

At the end of June FinMin Anton Siluanov believed that should the risks of budget revenues performance remain, by 2016 the Reserve Fund will amount to 3.8% instead of expected 5.1% of GDP. Transfers to the fund will be used cover budget deficits in the mid-term. At the same time while it was previously planned in the “budget rule” to have the Reserve Fund reach 7% of GDP by 2017, now this is expected in 2019, Siluanov added.

Siluanov estimated that budget deficit this year could amount to 0.4% of GDP, to 0.56% of GDP in 2014, and 0.6% of GDP in 2015. At the same time missing revenues this year could reach RUB 1tn vs. RUB 500bn-RUB 600bn fallout previously estimated by the FinMin. It is attributed to lower tax revenues and privatisation revenues.