Russia’S State Budget In H1 2014

According to the data provided by the Federal Treasury of Russia, in H1 2014 federal budget revenues kept growing and accounted for 21.1% of GDP, gaining 1.1 p.p. of GDP over the level observed during the corresponding period of the previous year. At the same time, during the period between January and May of the current year consolidated budget revenues of the constituent territories of the Russian Federation as percentage of GDP stop shrinking, which has been observed since the beginning of the year1, and remained at 12.6% of GDP observed within the fi rst fi ve months in 2013. At the end of the period of January to June of the current year the federal budget ran a surplus of 1.9% of GDP; in addition, a positive balance was reached s a result of the execution of the consolidated budget of the constituent territories of t he Russian Federation in the period between January and May 2014, 1.1% of GDP. Therefore, the Russian Federation is currently showing positive dynamics of the key parameters of the Russian budget system, which implies that budget sustainability isn’t exposed to material risks in the short run (a few months to come). However, the status of the Russian budget system doesn’t seem to be optimistic in the mid run. The Main Trends in the Budget Policy in 2015 and the Planning Period of 2016 and 2017 (hereinafter – “the MTBP-2015”) were published on the offi cial website of the Ministry of Finance of Russia in July 2014, in which the budget system is anticipated to run a defi cit from 1.0% of GDP in 2014 to 1.5% of GDP in 2017.