Russia’s federal budget revenues in September grew by 19% year on year (+33% y/y over 9M24) to RUB3.3 trillion, out of which oil and gas revenues were up 4% y/y (+49% y/y in 9M24) and non-oil and gas revenues up by 24% y/y (+24% y/y in 9M24). 

Budget expenditures grew by 34% y/y (+23% y/y in 9M24) to RUB2.8 trillion.  As a result, the federal budget posted a surplus of RUB0.5 trillion, which implies a surplus of RUB0.2 trillion in 9M24 (0.1% of GDP). 

As followed by bne IntelliNews, a major spending surge is expected at the end of 2024. While the budget spending was within the seasonal norm in September, it expected to spike towards the end of the year, with the the Ministry of Finance expecting a federal budget deficit of RUB 3.3 trillion (-1.7% of GDP) in 2024 overall.

“The updated budget plan for 2024 implies substantial spending in 4Q24 (RUB13.3 trillion, or half of 9M24 spending). As a result, either the plume of this fiscal stimulus will continue to weigh on demand and inflation early next year, or the unutilised spending will technically be carried over to 2025, implying a smaller-than-planned reduction in the [fiscal] stimulus in 2025,” Renaissance Capital analysts commented.

With this in mind, the analysts expect the Central Bank of Russia to raise the rate by 1 percentage point up to 20 % at the October 25 policy board meeting and see another rate hike of a similar magnitude at the December meeting as the most likely outcome.