The government already considered the first version of the three-year budget plan for 2008–2010 in March. Since then, the Ministry of Economic Development has increased its economic forecasts for GDP, industrial growth, household income, and other macroeconomic indicators. On the other hand, tax revenues, especially VAT and extraction tax, are lagging behind planned indicators in 2007. The Federal Tax Service and the Ministry of Finance predict that budget revenues for 2007 will be lower than planned.

All this forced the Ministry of Finance to recalculate the revenues and expenditures of the 2008–2010 budgets. It turned out that in 2007 the budget will be balanced with a better result than the Ministry of Finance expected in March, and in the following two years – worse (see table). The forecast for the 2008 budget surplus has been reduced by more than half, and in 2009 revenues exceed expenditures by an insignificant 14 billion rubles for the budget, and next year the budget will be balanced with zero.

The revenue forecast was not significantly lowered, while expenses increased more noticeably. Finance Ministry officials yesterday refused to comment on the budget calculations submitted to the government the night before. The Cabinet of Ministers will consider the budget projections on Thursday.

The Finance Ministry proposes to borrow the missing money abroad. By the end of 2010, the external debt could reach 1,232.9 billion rubles – almost 180 billion rubles more than the estimate the financial department had a month ago. “Borrowings within the country have already increased, and the Finance Ministry has included the possibility of borrowing money abroad just in case,” says an official from one of the relevant departments. If the income is higher than expected, there will be no need to borrow abroad.

An official of the Ministry of Finance, speaking on condition of anonymity, said that external loans are supposed to be taken, in particular, from the World Bank - projects of government guarantees are being discussed, investment projects will be financed jointly by the WB and the government. In addition, support for exports will be increased. So far, guarantees are laid down every year, but most of them are not used.

Reserves for domestic borrowing are limited, notes Natalia Akindinova, an economist at the Development Center. In addition, it is more profitable to borrow on the external market than on the internal one: Russia has virtually no external debt, we have a good reputation as a borrower and high ratings – it will not be difficult to borrow the necessary amount.

There is no need to urgently spend the nearly 370 billion rubles that the Finance Ministry additionally found in 2007 revenues, notes deputy Natalya Burykina. Moreover, it will not be easy to spend this amount efficiently in six months, she adds. The Finance Ministry will put the rest of the funds aside for a rainy day: they will come in handy in 2008-2010, when expenses will be high and the external situation will be tougher, Akindinova believes.

Additional revenues should not be preserved, but urgently sent to finance municipalities, says Valery Galchenko, a member of the State Duma Budget Committee. Galchenko considers the already planned revenues to be underestimated, and the increase in external debt in the presence of a stabilization fund and “decent” forecasts for oil is strange.

An increase in the external debt forecast does not mean that these borrowings will actually be carried out, believes Trust economist Evgeny Nadorshin. In this way, the Finance Ministry is simply insuring itself against a shortfall in income, he says: “The Finance Ministry is trying to diversify borrowings so as not to overstrain the domestic market.”

For now, however, the 2007 budget revenues are meeting the Finance Ministry's worst expectations. As the Federal Tax Service reported yesterday, tax revenues in January-March increased by 12% compared to the same months in 2006, but the federal budget received 7% less than last year. The worst situation is with the collection of value-added tax - its revenues fell by 22.6%. However, the fight against grey salaries is going well: social tax revenues increased by 31%, and income tax - by 35.1%.

There is not enough income