The Ministry of Finance predicted budget cuts for 18 years


Budgetary expenditure in relation to GDP will decline next 18 years due to the decline of its revenue. About this newspaper “Vedomosti” with reference to the long-term budget forecast of the Ministry of Finance until 2034, which was introduced in the state Duma.

In the document the Ministry of Finance predicts that the revenues and expenditures of the budget system by the middle of 2030-ies will fall to the level of the beginning 2000-x years. At constant tax legislation, budget revenues will decrease from 33.3% of GDP in 2016 to 29.9% of GDP in 2034. For comparison, the budget revenues in the period 2001-2003 accounted for 30-31 percent of GDP.

More likely, follows from the document, reduced the income of the Federal budget. They will decrease from the current 16.1% of GDP to 13.1% of GDP. In 1999, Federal budget revenues amounted to 12.8% of GDP in 2000 to 15.5% of GDP, the newspaper reminds.

The Finance Ministry predicts that the Federal budget revenues will decline primarily due to the reduction in revenues from the oil and gas industry – from 5.8% to 3.6% of GDP. The document emphasizes that if the income is not to reduce costs and keep them at the level of 2016 (37,3% of GDP), the budget deficit will rise from 4% of GDP in 2016 to 8% of GDP in 2030.

The document says that the calculations made on the basis of the forecast long-term economic stagnation, the inertial variant of development without significant changes in the socio-economic and financial policy.

Previously, the Ministry in its long term Outlook to 2035 has predicted Russia’s 20-year stagnation. So in the base case GDP will grow on average by 1.8% per year, in the “basic plus” variant – 2%, in the target – 3.6%.

Source