Assessment of the Impact of the Russian Federation Budget System Parameters on Inflation Levels in the National Economy

Victor A. Byvshev () and Egor V. Pakhomov ()

Economics of Contemporary Russia, 2025, vol. 28, issue 3

Abstract: The econometric assessment of the impact on inflation levels in the Russian economy of the main parameters of the budget system of the Russian Federation, which include: 1) total budget revenues, 2) total budget expenditures, 3) budget deficits, is discussed. The paper builds two econometric models in which the annual levels of inflation in the Russian economy over the time 2007–2023 are taken as an explicable variable. The explanatory variables of the model include derivatives of the main parameters of the budget system of the Russian Federation. The main results of the work are as follows. Budget deficits in the current and lag period do not affect inflation levels. Budget momentum (primary budget deficit) in the current and lag period does not affect the inflation levels. The growth rate of nominal budget revenues does not affect the levels of inflation in the current and lag period. The growth rate of nominal budget expenditures has a significant direct impact on inflation levels in Russia. The growth rate of nominal budget expenditures for servicing state and municipal debt has a significant direct impact on the inflation rate in Russia. Adverse events such as the global financial crisis and Western sanctions have a significant negative impact on the Russian economy, increasing annual inflation rates by an average of 5% per year.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ack:journl:y:2025:id:1072

DOI: 10.33293/1609-1442-2025-28(3)-5-13

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