BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/04
Federal budget expenditures rose 5 % in nominal terms and contracted substantially in real terms. Expenditures slightly exceeded the original spending estimate, even if that plan was cut last spring. After increasing at an average rate of 18 % a year during 2007−2014, defence spending increased 28 % last year. Defence spending as a share of GDP increased a percentage point to 4.3 %. The last time this share was so large was in 1994. The Stockholm International Peace Research Institute (SIPRI) estimates that the defence share of GDP already reached 4.5 % in 2014. In contrast, non-defence expenditures last year rose just 0.5 %. The budget deficit was 1.9 % of GDP with interest payments on debt excluded. With the interest payments included, the deficit was 2.6 % of GDP, which was still much less than had been expected in last spring’s finance ministry estimate.
Federal budget expenditure growth in rubles, %
Source: Ministry of Finance.