Assessment of Russian fiscal space and directions for improving fiscal policy under the influence of sanctions restrictions

Abstract

Under the circumstances of the dynamic geopolitical situation, it is becoming increasingly important to develop an effective methodology for assessing fiscal space. Fiscal space formation depends on a number of key factors, including economic development of a country, the size of its population and labor force, and the tax system efficiency. Understanding these factors and being able to use them correctly helps a country to manage its finances effectively and ensure sustainable development of its economy. The sanctions imposed on Russia by “unfriendly” states have revealed a huge number of weaknesses in the modern domestic economy, so it is necessary to approach the issue consciously and comprehensively. It is necessary to revise budget priorities, search for additional funding, and support the economy sectors most vulnerable to the sanctions pressure from Western countries. For the state development and its financial stability, it is becoming more urgent. The government will be able to make more informed decisions on fiscal policy and maintain stability and reliability of the federal budget in conditions of volatility and uncertainty, if a more accurate and adaptable method to assess fiscal space is developed.

Keywords

• fiscal space
• budgetary policy
• economic growth
• promising directions
• sanctions restrictions
• strategic priorities
• macroeconomic stability
• fiscal policy