Russia's government spending in 2020 hit a record high in post-Soviet history

In 2020, the government spent a record amount in real terms since the early 1990s. With the exception of an extraordinary pandemic year, fiscal policy in RUSSIA remains tight, including against the backdrop of sanctions

The expenditures of the consolidated budget of Russia, including off-budget social funds, in 2020 turned out to be a record (in constant prices) in the entire history of the Russian Federation, follows from the assessment of Andrey Chernyavsky, a leading researcher at the HSE Development Center. We are talking about an expanded understanding of government spending: the federal budget, regions with municipalities, plus three off-budget funds.

Federal spending last year increased by 25% compared to 2019 against the background of additional anti-crisis spending by the government by at least 2.9 trillion rubles. (assessment by the Accounts Chamber). The consolidated budgets of the regions grew by 15%, mainly due to an increase in healthcare spending, follows from the data of the Federal Treasury. As a result, Russia's expanded government spending in 2020 reached 42.15 trillion rubles, of which 54% came from federal budget expenditures (49% in 2019).

Economists assessed the reduction in government spending and the consequences of tax increases Economics

As a percentage of GDP—another way to bring spending across years (otherwise distorted by inflation) to a common denominator—expanded government spending in 2020 was 39.5% of GDP—nearly 5 p.p. more than the average for 2011-2019. In the post-Soviet history of Russia, the relative expenditures of the entire budget system were higher only once - in the crisis year of 2009 (41.4% of GDP), but then Russian GDP fell by 7.8%. Anti-crisis support for the economy "increased government spending to almost 40% of GDP - a record level," says the Institute for Economies in Transition of the Bank of Finland (BOFIT).