MOSCOW, September 21. /TASS/. Russia’s draft federal budget for the next three years is challenging, Finance Minister Anton Siluanov said speaking at the Moscow Financial Forum.
He stressed that the ministry's team would never allow a return to the "financial sloppiness" seen in the 1990s.
TASS has compiled the key statements made by the Finance Minister.
Attention to detail
The Finance Ministry team will never allow the "financial sloppiness" of the 1990s to repeat: "Our Finance Ministry team always strictly adheres to our capabilities and balances them carefully. We have absorbed the lessons of financial history and will never allow that financial 'sloppiness' of the '90s - if you can call it that - to happen again."
"Having learned from the history of the '90s - I lived through it myself and know how things happen. This can happen quickly and unexpectedly. One moment there are liabilities, and the next, they just vanish. Why? Either foreign currency debts have accumulated and the exchange rate shifted, or short-term government bonds require rapid refinancing but the financial market refuses to provide the funds. This understanding has been ingrained in me personally ever since those days."
US sanctions against Russia
Russia has built up an immunity to the US "sanctions from hell": "You know, we have probably already developed an immunity to all kinds of sanctions, whether they are ‘from hell’ or not. We just go about our business, and these ‘sanctions from hell,’ so to speak, bounce right off our financial policy."
Federal budget
The draft federal budget for the next three years is "challenging": "The government began working on the budget early in the year. We started in the very first months of this year, already understanding that the budget for the upcoming three-year period would be a difficult one. It has always been challenging in recent years, and it is no different now."
Russia's federal budget for next year will be drafted with a deficit of around 2% of GDP, but this "poses no risks."
National defense and security will be a key priority in the 2027-2029 budget: "The most critical task right now is defense and supporting the front line. Equally important is ensuring that our citizens do not feel the strain of this concentration of resources-that all social obligations are met and life goes on just as it did in previous years. I hope we have succeeded in achieving that."
The Finance Ministry is paying close attention to tax measures aimed at fighting the shadow economy: "When it comes to taxes, we are currently prioritizing the formalization of the economy. And, by the way, it is working."
The Ministry drafted the budget based on a cut-off price of $50 per barrel: "We have structured the current budget based on a cut-off price of $50 per barrel. Why so low? Although, in reality, it isn't low. That money could have been allocated to spending. But wait-we must not jeopardize the budget or create risks. What if the price drops below that? And it is highly possible that it will; in fact, it likely will. What would we do then? Drain our reserves? No, that would be a bad decision."
The importance of reserves
Having a reserve of resources is crucial: "We are building up reserves right now."
Every financial professional needs a "nest egg" - it is one of the rules of financial management: "I believe this is a hallmark of sound financial practice."
The Finance Ministry is not opposed to new spending, provided it yields results in the form of increased personal income or contributions to the economy: "We are not against new spending. First and foremost, this spending must deliver results. It needs to either generate more income for our citizens or ensure that for every kopeck of public money spent, businesses chip in three kopecks of their own. Ultimately, that would represent a real contribution to the economy. The Finance Ministry always supports that kind of spending."
Monetary Policy
The Finance Ministry has done everything on the fiscal side to enable the Central Bank to ease monetary policy: "It is crucial right now that inflation expectations and interest rates come down. We are constantly reviewing the projected budget deficit for the three-year period with the Central Bank; the Central Bank will base its monetary policy on these figures."
National Wealth Fund
The Finance Ministry plans to build up the National Wealth Fund (NWF) resources this year: "We expect-and prices are currently working in our favor-to take this opportunity to replenish the National Wealth Fund."
"Since 2019, we have spent 15 trillion rubles ($178 bln) from the NWF, our 'nest egg.' Out of that amount, only 4 trillion [rubles] ($47.5 bln) went toward investment. We advocate for putting this money to work in the economy so it generates additional revenue through tax returns."
Artificial Intelligence
Artificial intelligence is an interesting and "underrated" topic: "I recently attended a G20 financial meeting where finance ministers dedicated an entire session to this subject. After all, artificial intelligence helps save money and identify untapped reserves within the budgets we are discussing."
