Kremlin's quiet cash boost: $15bn more for military push
The Russian parliament is preparing regulations that will allow the Russian government to increase budget expenditure this year by the equivalent of over $15 billion, writes Wyborcza.biz. However, there will be no official budget amendment. The Kremlin wants to avoid this as it has already amended the budget for 2024.
The amendment to the state budget regulations was accepted in the first reading by the Duma, the lower house of the Russian parliament. This enables the government to increase budget spending by 1.5 trillion roubles, over $15 billion (over £12 billion).
"This money is intended for additional expenditures as determined by the President of Russia, Vladimir Putin. The project does not specify exactly what this money will be used for. However, the Russian Finance Minister, Anton Siluanov, admitted that it is essentially for spending on the war against Ukraine," it states.
"These are additional expenditures for securing the needs of the special military operation. We are in constant dialogue with the Ministry of National Defence, and the need for allocating additional funds for this purpose has arisen," said Siluanov from the rostrum in the Duma.
State finances à la Russia: Amendment without amendment, zero deficit
The service reminds us that "special military operation" is a Russian euphemism for the war against Ukraine. The head of the Russian finance department also noted that the state would need to spend more on subsidies for loans (e.g., mortgages) and servicing government loans. This results from a sharp rise in interest rates responding to inflation, driven by the wage surge in sectors of the economy directly or indirectly related to the arms industry and military supplies.
The formal budget amendment for 2024 took place at the beginning of July. At that time, Russia's budget expenditures were increased by 522 billion roubles, equal to over $6 billion (around £5 billion). This increased the planned deficit to 2.12 trillion roubles. This time there is no official budget amendment, but regulations are being changed, giving the government of the Russian Federation blanket authority to increase this year's budget expenditure.
"However, according to preliminary estimates after three quarters, the Russian budget had no deficit at all. The weakening of the rouble against the dollar provided Russia with increased revenues from oil and fuel exports, and rampant inflation ensured growth in VAT income and income taxes," writes Wyborcza.biz.
