25.11.2020

The Ministry of Finance did not have enough income in the new forecast of the Ministry of Economic Development

Why do we need forecasts: to anticipate future risks or to bring the future closer, in advance preparing for its onset? If you provide an answer to the question posed to the Ministry of Finance, then neither one nor the other. Everything is much more prosaic.

The department of Anton Siluanov is interested in the future insofar as: for him, the main thing is the correspondence of future budget revenues to those expenses that the Ministry of Finance needs. But it seems that the future, drawn by the Ministry of Economic Development, is not satisfied with the Ministry of Finance – there are not enough income.

The final figures of the growth of the Russian economy, which were reached by the forecasters of the Ministry of Economic Development, again did not satisfy the Ministry of Finance. The problem is that after the inevitable contraction of the budget in 2020, the Ministry of Finance expects a noticeable increase in budget expenditures, which should correspond to economic growth. The essence of the position of the Ministry of Finance is precisely in this: not so much the budget should correspond to the state of the economy, but, on the contrary, the economy should correspond to budget plans.

The Ministry of Economic Development, however, tried so hard as it could. In the latest version of the forecast, the fall in GDP in 2020 will not be 5%, as in the previous version, but 4.8%. The economic growth in 2021 is now estimated at 3.2%, and not at 2.8%, but Maxim Reshetnikov’s subordinates still could not cope with the role of the “goldfish”, which, although not the first time, could satisfy the mistress of the broken trough.

In the film “Election Day 2” one of the heroes justifies his participation in the election campaign by the fact that he has already spent the money that he will earn. The Ministry of Finance has not far left this position. But if the forecast will be adjusted to the budget, and not vice versa, then all of us, figuratively speaking, will live in a drawn budget house. But the Ministry of Finance will be able to report that the budget will cope with new obligations that the president is not tired of adding. The one who said: “To manage means to anticipate” did not know the hardware mores and customs.

In addition to them, there are theatrical customs. There are even “theatrical” days. The backroom dispute between the Ministry of Finance and the Ministry of Economic Development became known last week. The second act of the same play soon became publications about the speech of the Central Bank chairman Elvira Nabiullina. In the ensuing dispute, she in absentia acted as an arbitrator, once again announcing the forecast of the Central Bank. On Neglinnaya in 2020, the Russian economy is expected to fall by 4–6%, and in 2021 – growth by 2.8–4.8%. In fact, the Central Bank forks look good in the hands of the Ministry of Finance. Bank of Russia demonstrates a greater margin of optimism than the Ministry of Economic Development

But what a play without the third act! He took place. Without it, the picture of the future of the Russian economy with the ensuing budget revenues and associated expenditures would be one-sided. The thread of intrigue would remain unstretched – everyone competed with each other in optimism, which from that would already look strained.

The third act sharpened the intrigue to the limit, providing an opportunity to look at what is happening on the stage from the other side. Bloomberg Agency spoke about the probable approach of the second wave of coronavirus. According to the World Health Organization, on June 21, a record was set for the daily increase in patients with COVID-19 in the world. The situation escalated in the United States, high risk persists for Germany, Australia and other developed economies. In developing countries such as Brazil, India, Indonesia, the pandemic continues to gain momentum. What does this mean for the economy, we already know.

But here’s a reminder: according to the Organization for Economic Cooperation and Development (OECD), in the event of a repeated outbreak of a pandemic, Russia’s economy will decline by 8-10% in 2020. Then all the disputes between the Ministry of Finance and the Ministry of Economic Development will become last year’s snow.

What is alarming, the forecast of the Ministry of Economic Development, the second wave of coronavirus bypassed. The forecast, like the Ministry of Finance, is not about the risks that the future carries.

2 thoughts on “The Ministry of Finance did not have enough income in the new forecast of the Ministry of Economic Development

  1. But what a play without the third act! He took place. Without it, the picture of the future of the Russian economy with the ensuing budget revenues and associated expenditures would be one-sided. The thread of intrigue would remain unstretched – everyone competed with each other in optimism, which from that would already look strained.

  2. Like!! Really appreciate you sharing this blog post.Really thank you! Keep writing.

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