Long-Term Fiscal Risks and Sustainability in an Oil-Rich Country : The Case of Russia

Bogetic, Zeljko; Smits, Karlis; Budina, Nina; van Wijnbergen, Sweder

dc.creator	Bogetic, Zeljko
dc.creator	Smits, Karlis
dc.creator	Budina, Nina
dc.creator	van Wijnbergen, Sweder
dc.date	2012-03-19T18:38:43Z
dc.date	2012-03-19T18:38:43Z
dc.date	2010-03-01
dc.date.accessioned	2023-02-17T21:02:27Z
dc.date.available	2023-02-17T21:02:27Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100317120425
dc.identifier	http://hdl.handle.net/10986/3727
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244691
dc.description	Russia entered the global crisis with strong fiscal position, low public debt, and large fiscal and monetary reserves, which helped it cushion the crisis shocks. But the rise in the non-oil fiscal deficit in 2007-08 and, more importantly, the massive impact of the global crisis in late 2008 and 2009 have dramatically altered Russia's medium-term and long-term economic and fiscal outlook. While Russia is emerging from this crisis on a much stronger footing than during the 1998-09 crisis thanks to its strong-pre crisis fundamentals, large fiscal reserves and solid management of the crisis, it will nevertheless need to implement sustained fiscal adjustment in the coming years. Both revenue and expenditure measures will be needed. This will require 2-3 percentage points of GDP in fiscal adjustment for about five years in addition to keeping total expenditure levels at a relatively low 31.5 percent of GDP, consistent with long-term social expenditure needs and requirements of long-term fiscal sustainability. Following a period of adjustment, if Russia would restrain its long-term non-oil deficits to the permanent income (PI) equivalent of its oil revenues as proposed in this paper, its fiscal policy will return to long-term sustainable path. The long-term, sustainable level of non-oil fiscal deficit is estimated at about 4.3 percent of GDP. With the 2009 actual non-oil fiscal deficit of about 14 percent of GDP, this implies significant and sustained fiscal adjustment over the medium term. The expenditure needs of the social security system as well as a reduction in key non-oil taxes represent a major fiscal risk to all scenarios.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5240
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ALLOCATION
dc.subject	ARREARS
dc.subject	ASSET POSITION
dc.subject	BANK BORROWING
dc.subject	BANK EQUITY
dc.subject	BANK LENDING
dc.subject	BANK LOANS
dc.subject	BANK POLICY
dc.subject	BANKING CRISIS
dc.subject	BANKING SECTOR
dc.subject	BANKING SYSTEM
dc.subject	BASELINE SCENARIO
dc.subject	BASIS POINT
dc.subject	BASIS POINTS
dc.subject	BOND SPREADS
dc.subject	BUDGET BALANCE
dc.subject	BUDGET CONSTRAINT
dc.subject	BUDGET LAW
dc.subject	BUDGET PLANNING
dc.subject	CAPITAL ACCOUNT
dc.subject	CAPITAL ADEQUACY
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL FORMATION
dc.subject	CAPITAL GAIN
dc.subject	CAPITAL INFLOWS
dc.subject	CAPITAL INVESTMENT
dc.subject	CAPITAL MARKET
dc.subject	CAPITAL OUTFLOW
dc.subject	CAPITAL OUTFLOWS
dc.subject	CASH SETTLEMENTS
dc.subject	CENTRAL BANK
dc.subject	COLLATERAL
dc.subject	COMMERCIAL BANK
dc.subject	COMMERCIAL BANKS
dc.subject	CORPORATE BORROWERS
dc.subject	COUNTRY RISK
dc.subject	CREDIT RISK
dc.subject	CREDIT RISKS
dc.subject	CREDITOR
dc.subject	CURRENCY
dc.subject	CURRENCY CRISIS
dc.subject	DEBT ACCUMULATION
dc.subject	DEBT CRISES
dc.subject	DEBT DYNAMICS
dc.subject	DEBT LEVELS
dc.subject	DEBT OVERHANG
dc.subject	DEBT RESTRUCTURING
dc.subject	DEBT SERVICING
dc.subject	DEBT-SERVICE
dc.subject	DEBTOR
dc.subject	DEFAULT RISK
dc.subject	DEFICITS
dc.subject	DEPOSIT
dc.subject	DEPOSITS
dc.subject	DEVALUATION
dc.subject	DOMESTIC DEMAND
dc.subject	DOMESTIC GOODS
dc.subject	DOMESTIC INTEREST RATES
dc.subject	DOMESTIC LIQUIDITY
dc.subject	ECONOMIC DEVELOPMENT
dc.subject	ECONOMIC GROWTH
dc.subject	ECONOMIC RECOVERY
dc.subject	EMERGING ECONOMIES
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET BOND
dc.subject	EXCHANGE RATE
dc.subject	EXPENDITURE
dc.subject	EXPENDITURE COMMITMENTS
dc.subject	EXPENDITURE CONTROL
dc.subject	EXPENDITURE LEVEL
dc.subject	EXPENDITURE LEVELS
dc.subject	EXPENDITURE POLICY
dc.subject	EXPENDITURE PROGRAMS
dc.subject	EXPENDITURES
dc.subject	EXPORT GROWTH
dc.subject	EXPORTERS
dc.subject	EXTERNAL BORROWING
dc.subject	EXTERNAL FINANCING
dc.subject	FEDERAL BUDGET
dc.subject	FINANCIAL CONDITIONS
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL FLOWS
dc.subject	FINANCIAL SECTOR
dc.subject	FINANCIAL SECTOR INDICATORS
dc.subject	FINANCIAL STATEMENTS
dc.subject	FINANCIAL SYSTEM
dc.subject	FISCAL ADJUSTMENT
dc.subject	FISCAL BALANCE
dc.subject	FISCAL COST
dc.subject	FISCAL DEFICIT
dc.subject	FISCAL DEFICITS
dc.subject	FISCAL EXPENDITURE
dc.subject	FISCAL IMPLICATIONS
dc.subject	FISCAL LAXITY
dc.subject	FISCAL MANAGEMENT
dc.subject	FISCAL POLICY
dc.subject	FISCAL POSITION
dc.subject	FISCAL PROGRAM
dc.subject	FISCAL PRUDENCE
dc.subject	FISCAL REFORMS
dc.subject	FISCAL REVENUE
dc.subject	FISCAL RISK
dc.subject	FISCAL RISKS
dc.subject	FISCAL RULES
dc.subject	FISCAL SAVINGS
dc.subject	FISCAL STANCE
dc.subject	FISCAL SUSTAINABILITY
dc.subject	FIXED CAPITAL
dc.subject	FLEXIBLE EXCHANGE RATE
dc.subject	FOREIGN BORROWING
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN DEBT
dc.subject	FOREIGN DIRECT INVESTMENT
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE RESERVES
dc.subject	FOREIGN EXCHANGE RISK
dc.subject	GOVERNMENT DEBT
dc.subject	GOVERNMENT EXPENDITURE
dc.subject	GOVERNMENT EXPENDITURES
dc.subject	GOVERNMENT REVENUES
dc.subject	GROWTH RATE
dc.subject	HIGHER INTEREST
dc.subject	HIGHER INTEREST RATES
dc.subject	IMPLICIT SUBSIDIES
dc.subject	INCOME LEVEL
dc.subject	INCOME STREAM
dc.subject	INFLATION
dc.subject	INFLATIONARY PRESSURES
dc.subject	INFRASTRUCTURE DEVELOPMENT
dc.subject	INFRASTRUCTURE INVESTMENT
dc.subject	INFRASTRUCTURE PROJECTS
dc.subject	INTEREST EXPENDITURES
dc.subject	INTEREST RATE
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL TRADE
dc.subject	INVESTMENT PROJECTS
dc.subject	LABOR MARKET
dc.subject	LEVEL OF DEBT
dc.subject	LEVEL OF RISK
dc.subject	LIQUIDITY RATIO
dc.subject	LOAN
dc.subject	LOAN PORTFOLIOS
dc.subject	MACROECONOMIC INDICATORS
dc.subject	MACROECONOMIC MANAGEMENT
dc.subject	MACROECONOMIC STABILITY
dc.subject	MACROECONOMIC STABILIZATION
dc.subject	MARKET ACCESS
dc.subject	MARKET ECONOMY
dc.subject	MATURITIES
dc.subject	MEDIUM-TERM FISCAL FRAMEWORK
dc.subject	MINISTRY OF FINANCE
dc.subject	MONETARY FUND
dc.subject	NEGATIVE REAL INTEREST RATES
dc.subject	NET BORROWING
dc.subject	NET DEBT
dc.subject	NET PRESENT VALUE
dc.subject	NET SAVINGS
dc.subject	NON-PERFORMING LOANS
dc.subject	NONPAYMENT
dc.subject	NONPAYMENTS
dc.subject	OIL PRICE
dc.subject	OIL PRICES
dc.subject	OIL RESERVE
dc.subject	OIL RESERVES
dc.subject	OIL RESOURCES
dc.subject	OPERATIONAL DECISIONS
dc.subject	PENSIONS
dc.subject	PERPETUITY
dc.subject	POLICY RESPONSE
dc.subject	POVERTY REDUCTION
dc.subject	PRICE MOVEMENTS
dc.subject	PRICE UNCERTAINTY
dc.subject	PRICE VOLATILITY
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE CAPITAL INFLOWS
dc.subject	PUBLIC DEBT
dc.subject	PUBLIC EXPENDITURE
dc.subject	PUBLIC EXPENDITURES
dc.subject	PUBLIC FINANCES
dc.subject	PUBLIC INFRASTRUCTURE
dc.subject	PUBLIC INVESTMENT
dc.subject	PUBLIC INVESTMENTS
dc.subject	PUBLIC SECTOR
dc.subject	PUBLIC SPENDING
dc.subject	REAL EXCHANGE RATE
dc.subject	REAL INTEREST
dc.subject	REAL INTEREST RATES
dc.subject	RESERVE
dc.subject	RESERVE FUND
dc.subject	RESERVES
dc.subject	RETURN
dc.subject	RETURNS
dc.subject	RISK ASSESSMENTS
dc.subject	SERVICE CHARGES
dc.subject	SOCIAL EXPENDITURE
dc.subject	SOCIAL PROGRAMS
dc.subject	SOCIAL SECURITY
dc.subject	SOCIAL SECURITY SYSTEM
dc.subject	SOFT BUDGET CONSTRAINTS
dc.subject	SOLVENCY
dc.subject	SPENDING LEVELS
dc.subject	STABILIZATION PROGRAMS
dc.subject	STOCKS
dc.subject	STRUCTURAL DEVELOPMENT
dc.subject	STRUCTURAL REFORMS
dc.subject	SUB-NATIONAL GOVERNMENTS
dc.subject	SUSTAINABILITY ANALYSIS
dc.subject	SUSTAINABLE FISCAL POLICY
dc.subject	TAX
dc.subject	TAX COLLECTIONS
dc.subject	TAX RATE
dc.subject	TOTAL EXPENDITURE
dc.subject	TRADE BALANCE
dc.subject	TRADE CREDITS
dc.subject	TRANSPARENCY
dc.subject	TREASURY
dc.subject	TREASURY MANAGEMENT
dc.subject	WORKING CAPITAL
dc.title	Long-Term Fiscal Risks and Sustainability in an Oil-Rich Country : The Case of Russia
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	Europe and Central Asia
dc.coverage	Europe and Central Asia
dc.coverage	Europe
dc.coverage	Eastern Europe
dc.coverage	Commonwealth of Independent States
dc.coverage	Asia
dc.coverage	Russian Federation