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A New Step in Russia’s Budget Policy

A New Step in Russia’s Budget Policy

Author(s): Evsei Gurvich
Editor(s): Aglaya Snetkov Stephen Aris
Series: Russian Analytical Digest (RAD)
Issue: 121
Pages: 5-7
Publisher(s): Center for Security Studies (CSS), ETH Zurich; Research Centre for East European Studies, University of Bremen; Institute for European, Russian and Eurasian Studies, George Washington University
Publication Year: 2012

Russia’s state revenues grew considerably during the 2000s, fell sharply during the international financial crisis, and have since recovered. Looking forward, revenues are likely to remain steady or fall as Russia’s physical oil output plateaus. While the president plans to honor the promises he made during his campaign, Russia will impose budget discipline beginning in 2013. Some critics of Russia’s budget policy complain that cutting budget expenditures will hurt economic growth. Others complain that saving oil profits in a Reserve Fund deprives the economy of infrastructure investment. While macro parameters of Russia’s fiscal strategy may be on track, currently the expenditure structure is deteriorating with less money spent on infrastructure and human capital and more going to defense and security. Russia can improve the effectiveness of its budget expenditures, but only if it make this goal a top government priority.

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