OREANDA-NEWS. March 15, 2010. The Finance Ministry released federal fiscal figures yesterday for February, with revenues at RUB570bn and expenditures amounting to RUB852bn. The fiscal deficit was estimated at 8.6% of GDP in February, and at 3.2% GDP for 2M10, reported the press-centre of OTKRITIE Financial Corporation. 

View: We are concerned with the weakness of non-oil revenues, which are declining (-5%) compared to last February. Even though the budget lacks the Unified Social Tax this year, this figure is still weak. This hints that economic recovery remains weak, and suggests that further stimulus is needed. Expenditures stand roughly at the levels of last summer and fall, and indicate that the spending plan is being implemented smoothly. In the first two months of 2010, spending accounts for 15% of the annual plan, whereas in previous years this figure was 11%.

We believe higher expenditure levels in 2010 are explained by inter-budgetary transfers, including those necessary to implement pension increases. We expect the fiscal deficit to be posted at 5.8% for the full year.  According to the statistics, the money expended did not reach final recipients because the growth of the monetary base was quite modest (RUB 183bn) while the federal budget via CBR interventions injected nearly a half trillion rubles. We can only guess that the large share of money emitted remains on the CBR accounts of lower levels of the executive powers, such as ministries or regional budgets.