Economists estimated the additional expenses of the new Russian government
The spendings of the state apparatus on the implementation of national projects and the promises of Vladimir Putin this year could reach $34 billion, which is 1.3% of GDP, Bloomberg reports, citing the calculations of ING Groep N.V. Dolgin, an analyst at the company, claims that the Cabinet of Ministers is using assets from the National Welfare Reserve Fund to achieve its goals. In addition, the funds remaining from the 2019 budget will be used.
Based on the report of the Ministry of Finance, at the end of last year, the surplus amounted to 1.97 trillion rubles. Russia can safely increase spending thanks to surplus and international reserves, but Vladimir Putin is wary of doing so after the fall in oil prices in 2014, as well as the introduction of new sanctions.
Mikhail Mishustin, Russia’s prime minister, seeks to justify his appointment and prove that he can achieve the tasks set by the president. The new government is in favor of increasing the budget and government spendings. The portal separately mentions Andrey Belousov and Marat Khusnullin. The former proposed increasing the taxation of processing companies in 2018 in order to collect for 500 billion rubles more than usual. Khusnullin, in turn, is the engine of investment flow, thanks to which Moscow was transformed. Meanwhile, Anton Siluanov, who was a supporter of a strict credit and monetary policy, lost his post as First Deputy Prime Minister.
Bloomberg economist Scott Johnson is confident that the Russian budget will change. Although Siluanov left the post of Deputy Prime Minister, he remained the head of the Ministry of Finance. Therefore, any changes will be introduced gradually.