Growing holes in the budget, Gref money and ceiling of oil prices

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The shortage of the Russian budget over one of the last month of 2022 increased by 400 billion rubles compared to forecasts and exceeded 3 trillion rubles. The reason, most likely, in the December failure of budget revenues due to the entry into force of the European embargo and the ceiling of prices for Russian oil. In the first decade of 2022, oil prices remain relatively low ($ 80 per barrel of Brent), and the Russian Urals, according to Bloomberg, costs below $ 40. Such a price situation threatens the budget in 2023 even more serious problems.

According to the results of 2022, the Russian budget deficit amounted to 3.3 trillion rubles, or 2.3% of GDP, the Minister of Finance Anton Siluanov said today. This is 400 billion rubles, or 0.3% of GDP, more than the ministry predicted less than a month ago - December 12. At the end of September, the forecast was even more optimistic (1.3 trillion, or 0.9% of GDP).
The most obvious explanation of such a sharp increase in the hole in the Russian budget is the fall of oil revenues of the budget in December. There is no official data on oil and gas income for December, but their decrease was inevitable due to collapse of Russian oil prices amid the entry into force of the EU oil embargo from December 5. According to the Ministry of Finance itself, in December 2022, Russian oil Urals on average cost $ 50.47 per barrel-1.4 times cheaper than in December 2021 ($ 72.7), and 1.5 times cheaper than on average in 2022 ($ 76.7).
However, Alexander Isakov, the telegram channel “Fighting Figures” of the chief economist Bloomberg Economics in Russia today noted that the budget revenue for the year was close to the September forecasts of the Ministry of Finance. But significantly, by 2.1 trillion rubles, the expenditure part grew - and 1.3 trillion rubles from this additive were on “other expenses”, for which the articles “National Security” and “National Defense” are allegedly hidden.
The first month of operation of the European embargo on Russian oil has not yet been marked by the growth of world prices: Brent barrel now costs the same $ 80 as in early December. At the same time, Russian oil continues to become cheaper: on Monday, Bloomberg reported that on Friday the barrels of Urals in the port of Primorsk in the Leningrad Region sold at $ 38 - half as much as Brent barrel on the same day. In December, the Urals discount to Brent remained at the level of 30–35% - this was an unprecedented figure, but it did not reach 50%.
The budget for 2023 is a reverse with the same as in 2022, a deficiency of 2% of GDP and the average annual price of Urals $ 70.1 per barrel. The level of budget problems will depend not only on the price of oil, but also on the volume of production. To estimate the size of these problems allows the table on page 38 of this document of the Ministry of Finance. So, the price of Urals $ 50, which has already prevailed in December, with a decrease in production to quite real 9 million barrels per day, means oil and gas revenues in the amount of 6 trillion rubles - 2 trillion below the plan (and twice as much planned hole in the budget).

What am I to me?

It will be difficult to reduce expenses to the government in 2023, taking into account the ongoing war in Ukraine, which means that you will have to increase the revenue. In 2022, this was done, among other things, using the seizure of dividend income from hundreds of thousands of shareholders of Gazprom. In 2023, they also plan to replenish the budget by increasing the tax burden for large companies.

MONEY

Gloomy forecast of the World Bank

The World Bank sharply revised the forecast of the growth of the global economy for 2023 towards the decrease. Now analysts expect that the world GDP in 2023 will grow by only 1.7% instead of 3%, which the previous June forecast suggested. “The risks that we warned about six months ago were embodied, and our worst scenario has now become basic,” commented FT economist of the World Bank Ayhan Köse, responsible for preparing the report. According to the Forecasts of the World Bank, the growth of GDP of developed countries in 2023 will be only 0.5%, and developing countries, with the exception of China, - 2.7%. The Russian economy, according to the organization, will be reduced by 3.3%, and in 2024 it will increase by 1.6%

INVESTIGATION

Hermann Gref's money

In the publication "Project" (its previous legal entity was recognized in Russia as an undesirable organization) - a big investigation about the president of Sberbank Herman Gref. The main thing in it is Gref’s proven connection with the Altera Capital investment fund, founded by Gref’s former colleague in St. Petersburg in the 1990s, and in the 2000s his deputy in the Ministry of Economy Kirill Androsov. So, the “project” found the testament of Androsov, which he orders in the event of his death to transfer to Altera Capital Gref's nephew. Among the Altera assets are the Moscow Danilovsky market, a share in the GAZ group, oil companies and real estate in Moscow for hundreds of millions of dollars.

What else happened

The founder of the “PMC Wagner” Evgeny Prigozhin said that the PMC units took control of the Ukrainian soledar north of Bakhmut in the Donetsk region, and in the city center fights in the boiler. Ukrainian officials are still talking about "half -reduction".
Countries G7 are discussing the mechanism of the ceiling of prices for Russian oil products. This is the second series of discussion of the ceiling - first, from December 5, it was installed at $ 60 for raw oil, and now we are talking about oil products (diesel, fuel oil and kerosene), which the EU will stop importing from February 5. According to Reuters, now the main plan - two different ceilings: one - for those types of oil products that are traded with a bonus to raw oil (for example, diesel and kerosene), and the other when trading with a discount (fuel oil).
FT found out what Vladimir Putin and Xi Jinping was talking about less than a month before Russia's invasion of Ukraine. Putin, according to the sources of the publication, did not inform the leader of China about the scale of the invasion, but his phrase that “Russia does not exclude the adoption of any possible measures in the event of an attack by Ukrainian nationalists on its territory,” was perceived as evidence of a limited nature of the operation. According to the sources of the newspaper, for the failure of intelligence, which did not reveal the true intentions of Russia, he was reduced to the post of ex-Zamglava of the Ministry of Foreign Affairs of the PRC, a probable contender for the post of foreign minister Le Yuchen. The leadership of China will extract lessons from what happened, experts and sources of the newspaper say.
Great Britain has not yet made the final decision on the supply of tanks to Ukraine, but such an opportunity is being discussed, the representative of the British authorities confirmed .