In search of a billion dollars: the analyst calculated the budget expenditures for the military operation

A detailed analysis of what happens to Russian finances during a special operation in Ukraine is published on his blog by political analyst Dmitry Nekrasov:

“In early May, I gave my assessment of the real cash expenditures of the Russian budget in the conditions of the SMO (special military operation). And purely analytically, from general considerations, he came up with an estimate of 20 billion rubles a day as a set of fixed military spending plus the variable costs of the Russian Federation, due to the special military operation itself.

Recently I looked at the report of the Ministry of Finance on budget execution for 4 months. According to official reports, in March 2022, the military spending of the Russian Federation amounted to 450 billion rubles, or 15 billion a day, in April 627 billion, or slightly less than 21 billion a day. Thus, my completely out of my head "half to ceiling" analytics turned out to be very accurate.

For comparison: military spending in April 2021 amounted to 275 billion rubles, i.e. of April 2022 military expenditures, 9.1 billion per day corresponded to fixed peacetime expenditures, and 11.8 billion rubles per day is due to additional costs associated with the SMO. This again matches up almost perfectly with my 10+10 rating from a month ago.

To all those who spoke with pathos that the special operation costs the Russian budget 2 billion dollars a day - a big hello. On the whole, it can cost the economy more. But for two months a lot of people talked with aplomb about the government's spending on the SMO in the amount of 1-2 billion dollars (i.e. 120 billion rubles) per day. Many of those who have said this are simply ignorant, but I do not doubt the professionalism of some, so we, as usual, have observed deliberate lies to the public of what they want to hear from the desire to please them.

In total, in January-April, military spending exceeded the planned peacetime figures by about 700 billion, taking into account the growth of some non-military items, it could be 800-900 billion maximum.

A couple of numbers for comparison.

The federal budget surplus for 4 months amounted to 1.04 trillion rubles. or about 3% of GDP. Those. despite all the military spending, the budget not only did not go into negative territory, but in 4 months it managed to additionally put aside more into the egg-box than it spent on the SVO.

Moreover, Putin said that the consolidated budget surplus for 4 months amounted to 2.7 trillion. (I can’t understand the nature of this amount, most likely this is a reservation with 1.7 trillion, but it is clear that the surplus of the consolidated budget is even greater than the surplus of the federal one itself).

In any logic, the margin of financial stability of the budgetary system has not only not decreased over the time of the SMO, but has only grown so far. This will change in the coming months, April is already significantly worse than March, however, if current oil prices remain the same, I would not be surprised if the budget for the whole of 2022 is reduced to a surplus (Siluanov talks about a deficit, but the ex officio finance minister always says this).

Another figure for comparison is the cost of pensions. This is about 10 trillion by 2022, or more than 25 billion per day. Those. so far, expenditures on pensions alone are much larger than military expenditures in aggregate and 2.5 times greater than the additional expenditures caused by the SMO itself.

Once again I repeat the idea that I have repeatedly expressed that the destroyed tanks and aircraft, as well as the fired missiles, are expenses of past periods and do not affect the current budget expenditures in money terms. They may soon run out physically, but precisely because of the impossibility of physically replenishing them, and not because the money for the SMO will run out. As long as the supply of money itself continues to grow and there are no signs that they may run out on the horizon of several years, it is not visible.