Yesterday, First Deputy Minister of Finance Tatyana Nesterenko commented on the execution of the federal budget. According to her, in 10mo12 the federal budget surplus totalled RUB 717bn, or 1.4% of GDP, with RUB 9.7tn of expenditures having been made. The monthly budget surplus decreased to 0.8% of GDP (RUB 46bn) in October, from 1.8% of GDP in September (stated previously). In addition, MinFin estimates that the federal budget is to print a surplus of 0.2% of GDP (RUB 9.6bn) this month, and a deficit of 13.4% of GDP (RUB 769.1bn) in December.
Taking into account the planned volume for this year (with the most recent amendments), MinFin is to spend RUB 3.2tn in November-December 2012, which implies a maximum average YoY growth of 2% (vs. 32% YoY in 1H12). Hence, tighter fiscal policy is likely to have a negative effect on the growth of the economy in the near term. Moreover, given MinFin’s estimate of the federal budget balance for November-December, the overall effect of its federal budget operations on liquidity is likely to be positive, at around RUB 760bn. That would be RUB 240bn lower than during the last two months of last year.