Regional Budgets in Q3 2023

Alexander N. Deryugin – Acting Head of Department for Budget Policy of the Gaidar Institute for Economic Policy; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration; (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

As a result of the accelerated growth of the Russian economy in Q3 2023, the growth rates of tax and non-tax revenues of the consolidated budgets of the subjects of the Russian Federation reached double-digit values, which, while maintaining relatively low growth rates of budget expenditures in Q2 and Q3, became a precondition for high indicators of fiscal balance of regional and local budgets following the results of 9 months of 2023.

Key words: regions’ budgets, revenues of regional budgets, expenditures of regional budgets, intergovernmental fiscal transfers, regional debt.

JEL-codes: H61, H62, H63, H71, H72, H74, H77.

Restrictive Sanctions, Their Impact on Anti-crisis Management of an Industrial Enterprise and Some Directions for Coping with the Sanctions Crisis

Andrey V. Fuzik – Postgraduate Student of the Department of Management and Marketing, Russian Academy of Foreign Trade under the Ministry of Economic Development of Russia (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The aim of the article is to examine the factors determining the systemic sustainability of Russian industry in the context of restrictive sanctions and to identify the directions of anti-crisis management of industrial production in current environment. The study reveals the role of anti-crisis management of industrial production in Russia for its recovery. The approaches of various authors are analyzed, some solutions and ways to overcome crisis phenomena are proposed. The risks associated with the activities of industrial enterprises are described. It is revealed that management under sanctions depends not only on the activities of enterprises themselves based on internal and external processes, but also on the state policy.

Key words: sanctions, industry, crisis management, production.

JEL-codes: F51, H12, M10.

Problems of Involving the Private Sector in the System of Long-term Care for Elderly Citizens and People with Disabilities in Russia in Comparison with Foreign Countries

Maria G. Girich – Researcher of Russia-OECD Center under the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana A. Ilyushnikova – Deputy Minister of the Ministry of Economic Development of the Russian Federation (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Svyatoslav O. Sorokin – Director of Department for Social Services and Non-Profit Sector Development, Ministry of Economic Development of the Russian Federation (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Antonina D. Levashenko – Senior Researcher of the Institute of International Economics and Finance, Russian Foreign Trade Academy under the Ministry for Economic Development of the Russian Federation (Moscow Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ivan S. Ermokhin – Researcher of the Institute of International Economics and Finance, Russian Foreign Trade Academy under the Ministry for Economic Development of the Russian Federation (Moscow Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Since 2018, long-term care system has been launched in Russia to provide social, medical and rehabilitation (habilitation) services to elderly and disabled people in need of care. Long-term care system supports an opportunity to elderly and disabled people to self-serve, move independently, and provide basic life needs. It is planned that by the end of 2023, the long-term care system will be launched in all regions of Russia.

The article analyzes the main problems of financing the system, including low tariffs for social services, which, on the one hand, should be accessible to citizens, but on the other hand, are unprofitable and do not allow the involvement of private providers in the long-term care system. In addition, the article discusses the problems of attracting private investment in long-term care infrastructure in Russia, as well as examples of foreign experience for solving such problems.

Key words: long-term care system, OECD, social service providers, social services, elderly people, disabled people.

JEL-codes: H53, I38.

Analysis of Opportunities to Improve the Quality of Natural Resource Price by Combining Forecasts Resulting from Methods Based on Regression Estimates of Weights

Ekaterina V. Astafyeva – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Maria Yu. Turuntseva – Head of the Laboratory of Macroeconomic Forecasting of the Russian Presidential Academy of National Economy and Public Administration; Head of the Laboratory of Short-term Forecasting of the Gaidar Institute of Economic Policy, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. ; This email address is being protected from spambots. You need JavaScript enabled to view it.

Numerous empirical works indicate that combining (aggregation) forecasts can improve forecast accuracy compared to individual forecasts. This paper investigates the possibilities of regression methods of forecast aggregation to improve the forecast quality of prices for oil, aluminum, gold, nickel and copper. The calculations are based on the forecast database of the Gaidar Institute for Economic Policy. E.T. Gaidar Institute for Economic Policy, which provides an array of individual (aggregated) forecasts. All calculations are performed in (pseudo) real time.

Based on the findings obtained in the paper, it can be argued that for resource prices, regardless of the period under consideration, there is a regression method of aggregation that provides qualitative advantages relative to all primary forecasts. At the same time, summarizing the results of qualitative characteristics of regression and simple aggregation methods, it should be noted that the choice of the best method of combining forecasts (and even a group of methods) is ambiguous and depends on the indicator.

Key words: forecasts combination, forecast aggregation, oil prices, aluminum prices, gold prices, nickel prices, copper prices.

JEL-codes: C53, E31.

International Experience in Taxation of Sugar-Sweetened Beverages

Elena Ye. Chernyakova – Acting Head and Senior Researcher of Department for Tax System Development of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Anna F. Bogatyreva – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ekaterina A. Yastrebova – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

From July 1, 2023, an excise tax on sugar-sweetened beverages began to apply in Russia. Sugar-containing drinks are subject to taxation, which means drinks packaged in consumer packaging, made using drinking or mineral water, the components of which include sugar (glucose, fructose, sucrose, dextrose, maltose, lactose), and (or) syrup with sugar, and (or) honey and the amount of carbohydrates in the nutritional value of which is more than 5 grams per 100 ml of drink. It’s still too early to discuss the first results of including sugary drinks in excisable goods in Russia. To tax sugar-sweetened beverages is not a new concept in the world. It has already gained some international experience.

The article explores the global experience of taxing sugary beverages and presents research findings that demonstrate the beneficial effects of the implementation of appropriate taxation. Aspects of foreign experience that are not currently reflected in Russian law are noted and should be considered when drafting changes to the country’s current legal framework.

Key words: excise tax, sugar-sweetened drinks, international experience, taxes on sweet drinks.

JEL-codes: H20, H25, K34.

Evaluating the Role of Global Factors in GDP Nowcasting

Konstantin S. Rybak – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

This work shows that use of more than two global factors in standard factor-augmented model leads to significantly better nowcasts of Russian GDP growth rate. Global inflation and nominal factors are available for estimation almost in real-time which leads to earlier and better nowcasts.

Key words: GDP nowcasting, factor model.

JEL-codes: C53, C82, C38, E27.

New Challenges of the Information Age: Waste Management of Electronic and Electrical Equipment in the Russian Federation

Alexandra M. Avdonina – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Biological Sciences, Associate Professor (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Scientific and technological progress and the population growth determine the increase in production volumes of electrical and electronic equipment, further becoming electrical and electronic waste. Their composition, on the one hand, includes components valuable for production, on the other hand, makes them dangerous to the environment and human health. Therefore, there is a need to manage the flows of such waste.

In the article, special attention is paid to the analysis of the processes of waste management of electronic and electrical equipment, the current state of affairs, including the regulatory framework in this area, in the light of the formation of a closed-cycle economy in the Russian Federation as a general cycle of materials, excluding the formation of waste, i.e. ensuring the reusable reuse of raw materials on the basis of the priorities of reducing the use of primary materials, resource- and energy conservation.

The article was prepared as part of the research work of the state task of the RANEPA.

Key words: circular economy (CE), closed-loop economy, electrical and electronic equipment (EEE), waste electrical and electronic equipment (WEEE, E-Waste), municipal solid waste (MSW), extended producer responsibility (EPR), recycling, national project «Ecology».

JEL-codes: O13, Q01, Q53, P36.

Monitoring of Global and Russian Oil Markets

Eugenia M. Miller – Acting Head of Department for System Analysis of Sectorial Markets of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Repeated and rather frequent changes in the parameters of tax legislation, typical for the oil industry of the Russian Federation, may cause growth in the overall level of oil market uncertainty and a respective decline in the incentives for investment in development and modernization.

Key words: oil, world oil market, Russian oil market, oil production, oil prices, OPEC+, sanctions.

JEL-codes: L71, E3, Q3.

Mortgage lending in January-September 2023

Sergey A. Zubov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Сandidate of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In the first three quarters of 2023, the volume of mortgage loans issued significantly exceeded (by 71.8%) the same indicator of the corresponding period of 2022. The growth of household incomes, preferential mortgage lending programs, expectations related to its tightening, as well as joint programs of banks and developers are drivers of demand growth. Recently, there has been a deterioration in lending standards: the share of mortgage loans to borrowers with high debt burden ratio (DLR) has been increasing.

Key words: mortgage lending, subsidized mortgage programs, mortgage lending market overheating.

JEL-codes: E58, G21, G28.

Federal Budget Execution for January-October 2023: The Situation is better than Expected

Ilya A. Sokolov – Leading Researcher of the Financial University under the Government of the Russian Federation; Leading Researcher of the Gaidar Institute for Economic Policy, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Tischenko – Senior Researcher of the Gaidar Institute for Economic Policy; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The dynamic of federal budget revenues in January-October 2023 in comparison with the same period of the previous year was multidirectional: the growth of non-oil and gas revenues by 2.1 p.p. of GDP was followed by a decrease in rent revenues by 2.8 p.p. of GDP. The related increase in public expenditures by 0.7 p.p. of GDP in the first 10 months of 2023 as compared to the same period of 2022, although it slightly increased the federal budget imbalance as compared to the corresponding values of the previous year (increase in the budget deficit by 1.4 p.p. of GDP), but there is no noticeable increase in the risks of short-term budget instability.

At the end of the current year, due to the adjustment of taxation of the oil and gas sector, which makes it possible to prevent a further decline in rent revenues, preservation of the dynamics of VAT revenues outstripping the GDP growth rate, as well as incomplete utilization of the planned annual volume of expenditures, a budget deficit in the range of Rb2–2,5 trillion can be expected. If the planned volume of expenditures is achieved, the deficit may exceed this level.

Key words: federal budget, revenue, oil and gas revenues, non-oil and gas revenues, expenditure, taxes.

JEL-codes: H11, H50, H62, H63.

Banking Resources in January-August 2023

Sergey A. Zubov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Сandidate of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The RF Government’s and the Central Bank of Russia’s effective regulation of the credit and financial sector, as well as implementation of the policy on establishment of banking capital provisions have facilitated the banking sector’s sustainability in January-August 2023. Banks’ funding base has considerably increased owing both to growth in enterprises’ bank account balances as a result of budget expenditures funding and an inflow of funds to individuals’ deposits amid growth in households’ incomes in H1 2023.

Key words: Russian banking sector, banking resources, banks’ customer base, households’ resources, corporate resources, Bank of Russia.

JEL-codes: E58, G21, G28.

Accelerating Inflation Will Require a High Key Rate in 2023-2024

Yury N. Perevyshin – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute for Economic Policy; Director of Center for Сentral Banks Studies of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Based on October results, the year-over-year inflation (for the past 12 months) has sped up to 6.7% with the level of consumer prices in October increasing by 0.83%, thus amounting to 9.7% in terms of annual growth rates of prices with seasonality adjusted. On October 27, the Central Bank of Russia raised the key rate by 200 basis points to 15.0% annually; as a result, in the current cycle of the monetary policy tightening which began on July 21, the key rate has already increased twofold. The signal of the monetary policy’s further direction was mitigated and the regulator put its future decisions in dependence on the inflation rate’s actual dynamics in the forthcoming months. The Central Bank of Russia’s updated forecast allows growth in the key rate by another 100 basis points in December and its average increase by 150 basis points in 2024.

Key words: inflation, inflation expectations, monetary policy, key rate, Bank of Russia.

JEL-codes: E31, E52, F31.

Survey of Current Business (September-December 2023)

Sergey P. Aukutsionek – Head of Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Yegorov – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Inessa A. Bachirova – Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Serzhantova – Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Most of the indicators studied by the REB in September 2023 turned out to be approximately at the level of the previous month, which means they looked optimistic again. There were also records for the entire history of REB’s observations. For example, the level of the capacity utilization rate showed a new maximum – 93%. The maximum value, though not for the first time, was reached by the labor utilization rate (99%). The volume of orders was 103% of the normal monthly level, taken as 100 (second place). The share of enterprises in «good» or «normal» financial condition has increased to 98% (4 points above the previous record). At the same time the diffusion index of the expected in 3 months debt to banks reached its minimum value – 12%.

Key words: Russia, industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, financial situation, production restrictive factors.

JEL-codes: D22, D24, G31, L23, P23.