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Western Sanctions on Russia

The Russian authorities have demonstrated to the collective West that they have coped with the Western Sanctions on Russia imposed in 2022.

This is how URA.RU experts explained the preliminary results of the budget execution, which were announced by Prime Minister Mikhail Mishustin at the first government meeting of this year on January 10.

According to analysts, due to the Western Sanctions on Russia, the entire economy is being restructured with the help of public money.

The solution of large-scale tasks required serious expenses – over 31 trillion rubles, Mishustin said at a government meeting.

“All social obligations to citizens were strictly fulfilled. Support was provided to enterprises,” the head of the government of the Russian Federation added and gave the floor to the Minister of Finance of the Russian Federation Anton Siluanov.

The main task of the budget policy in 2022 was to help people, entrepreneurs, fulfill all social obligations, the minister confirmed.

“We have exceeded the revenue target. Their total volume amounted to almost 28 trillion rubles, which is 2.8 trillion rubles more than we originally planned. This was achieved both through oil and gas revenues and through an increase in value added tax as a result of increased demand,” Siluanov said.

According to him, the budget deficit amounted to 3.3 trillion rubles, or 2.3% of GDP. If we subtract compensation to off-budget funds due to deferral of insurance premiums, then the deficit amounted to 1.8% of gross domestic product, that is, less than 2%, the minister detailed.

“In general, the indicators are not bad. Significant efforts have been made to ensure macroeconomic stability. And of course, such work should be continued this year in order to fulfill the planned budget obligations,” Mishustin stressed.

The heads of federal departments were instructed to comply with the deadlines for financing the planned activities.

“Already today you have to deal with contracting personally. Look at the situation for 2023 in terms of all volumes, in terms of the limits of budget obligations. To improve the efficiency of spending funds, the government has adjusted the procedures and timing of decision-making,” Mishustin said at the end of the meeting.

The discussion of the draft budget for 2023-2025 began in September. Then Mikhail Mishustin announced that the budget would be transitional and deficit-free for the next two years.

The authorities announced a new budget rule, according to which about 8 trillion rubles of oil and gas revenues can be spent over the next three years. On November 24, the State Duma approved the federal budget.

Mishustin emphasizes that the state has coped with all the challenges despite the Western Sanctions on Russia, said Dmitry Solonnikov, director of the Institute for Contemporary State Development.

Western Sanctions on Russia
Western Sanctions on Russia

“The year is extremely difficult from all points of view, including for budgetary processes. The main financial document of 2022 was drawn up in completely different political and economic realities. The financial stability of the state has been preserved. At the beginning of 2022, it was assumed that everything would be much worse,” the political scientist specified.

The 2022 budget turned out to be completely different from what was planned a year ago, so the authorities made a preliminary assessment of what they entered 2023 with, said Vladimir Klimanov, director of the RANEPA Center for Regional Policy.

“The final information for January 1 will come a little later and the estimates that we have now are preliminary. It is unlikely that the main parameters will change. More frequent consideration of budgetary issues is due to the fact that the authorities at the beginning of the year thought about the income opportunities that are now emerging.

At the beginning of December 2022, a new package of EU sanctions appeared, affecting the price of oil. And even the approved parameters for October-November required a reassessment of costs and revenue opportunities,” the expert explained.

Despite the Western Sanctions on Russia, the authorities show the Russians that the wave on which the economy is developing will not weaken, it will move in the same direction and with the same strength, explains Mikhail Belyaev, candidate of economic sciences.

“Public funds play a serious role in overcoming the difficulties that the collective West has organized. They carried out import substitution programs, structural restructuring of the economy, and stimulation of its development. The topic of the budget was raised at the first meeting of the government, because the authorities want to indicate for the Russians, and most importantly for business, the direction in which the economy will develop,” the analyst said.