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Federal budget was almost balanced in April


According to the Ministry of Finance, the federal budget recorded a deficit of RUB 60bn, or 0.3% of GDP, in 4mo12. The monthly budget was almost balanced, at 0.2% of GDP (RUB 10bn) in April, staying in positive territory for the second month in a row (March saw a budget surplus of 1.7% of GDP, or RUB 82bn). Monthly revenues increased 16.0% YoY (flat in MoM terms), with non-oil monthly revenues strongly up 26% YoY. Monthly expenditures were almost the same, at slightly above RUB 1tn during the first months of 2012. In April, budget outlays were up 13% YoY.

MinFin’s outstanding deposits in the banking system amounted to RUB 39.4bn at the end of April, down RUB 4.9bn from the end of March. The balance of MinFin’s accounts with the CBR increased RUB 259bn during the fourth month of this year.

MinFin has persistently followed its path of regular budget execution (by RUB 1tn each month), bringing monthly budget balances close to zero. We estimate that the overall effect of MinFin’s operations on liquidity was a marginally negative RUB 30bn in April: its deposits in the banking system decreased (RUB 5bn), net domestic borrowings increased (RUB 34bn) and the budget was in surplus (RUB 10bn), meanwhile net budget loans added RUB 22bn into the system. This partly offset the positive effect of the CBR’s interventions last month (USD 4.0bn). Hence, the CBR’s REPO auctions are currently a key source for providing liquidity (outstanding REPO in the banking system is RUB 1.1tn), with the CBR’s FX interventions also having an effect (USD 10.8bn in 4mo12). 

Alexey Moiseev, Aleksandra Evtifyeva, Daria Isakova
VTB Capital analyst

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