The Ministry of Finance clarified budget expenditures on the economy and defense in 2024 | December 30, 2023

Source: RIA News”

Total federal budget expenditures in 2024 under the “National Economy” section will reach 4.2 trillion rubles, although the initial draft budget included in State Duma at the end of September, 3.89 trillion rubles were provided. Allocations for the “Social Policy” section will also increase compared to previous plans, but less – by 141 billion rubles, to 7.87 trillion rubles. This is stated in the updated budget for citizens posted Ministry of Finance Russia (RBC studied the document).

At the same time, total expenses for 2024 under the “National Defense” section decreased by 397 billion rubles, to 10.38 trillion rubles, and expenses under the “National Security and Law Enforcement Activities” section decreased by 103 billion rubles, to 3 29 trillion rubles, follows from the department’s materials. “Significant resources [также] will be provided for the restoration of new subjects of the Russian Federation and strengthening of national defense,” the document says.

The final spending plans in thematic areas are the result of the November redistribution of allocations for the second reading of the 2024-2026 budget in the State Duma. Then, as RBC wrote, the authorities transferred almost 1.2 trillion rubles from the closed part of the budget to the open part of the budget, reducing the share of closed expenses in 2024 by about 3 percentage points relative to the original version – from 30 to 26.8%. But the precise structure of expenses by area was unknown at that time.

Now the planned share of expenditures on national defense in the 2024 budget is estimated at 28.3%, social policy – 21.5%, national economy – 11.5%, national security and law enforcement – 9% (based on total budget expenditures of 36 .66 trillion rub.). Traditionally, some of the expenditures indirectly related to defense are allocated to “civilian” sections: for example, the “Social Policy” section includes pensions for former military personnel and at least part of payments to civilian personnel Ministry of Defense.

The Federal Budget Law “went through the classic stages of consideration of bills in the State Duma and Federation Council, which provide for finalizing the document, introducing amendments and changes,” the press service of the Ministry of Finance told RBC. “The budget for 2024–2026 is sustainable, balanced and will allow us to implement all decisions made. All obligations to citizens will be fulfilled. Key budget priorities received funding in full, and all planned expenses were fully covered by the revenue side,” the department emphasized.

“When you talk about reducing the share of spending on the economy, perhaps this is so, since the share of defense spending has increased – this is our main priority now, no one will argue with this,” Finance Minister Anton Siluanov said in September. “Yes, the share of expenses related to defense and security is increasing. The total amount of expenses is also growing significantly, so perhaps the share of other items is changing. But nominally there is no reduction,” he added.

“Many people say: what do we have now, a military budget? No, colleagues. Yes, expenditures have been increased in the military direction, but priority in budget expenditures is given to social issues,” Siluanov emphasized in October. He clarified that more than 30% of all expenses are allocated for social needs, and this is more than for the “National Defense” section. By social needs, the Ministry of Finance understands not only the “Social Policy” section of the budget, but also expenditures on healthcare, education, culture and sports.

Total expenditures on national projects in 2024 will amount to just over 3 trillion rubles, follows from the updated estimate of the Ministry of Finance (at the end of 2023 – about 3 trillion). Including the national project “Demography” – 890 billion, “Safe quality roads” – 621.4 billion, “Healthcare” – 283.8 billion, “Education” – 237.2 billion, “Housing and urban environment” – 122, 6 billion rubles.

Economic estimates in 2023

The Ministry of Finance expects that by the end of 2023 the economy will show growth of 3.5% “mainly due to the restoration of domestic demand – both investment and consumer (including in the context of the implementation of import substitution programs, namely increasing the production of domestic goods and services) “, the budget for citizens says. In the future, growth rates will reach a more moderate trajectory of 2.3-2.2%, it is noted there. A December survey of economists conducted by the Bank of Russia showed that the consensus forecast for Russian GDP growth in 2024 was 1.3%.

Real growth in investment in fixed capital by the end of 2023 is expected to be 10.1%, as follows from the document.

In addition, by the end of 2023, a significant increase in real wages is expected – by 6.9% after only 0.3% a year earlier, and this will provide major support to the dynamics of real disposable income of the population: plus 4.6% in 2023 after minus 1 % a year earlier.

“It is expected that by the end of 2023, the dynamics of household consumption will be at an increased level. In 2024-2026, household demand will begin to slow down amid weakening recovery momentum, as well as due to tighter monetary policy required to return inflation to target,” the Ministry of Finance points out.

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