Oil is no longer enough: Russia’s budget hole continues to widen

According to the Russian Ministry of Finance, in just five months, a shortfall of 3.4 trillion roubles (around €37 billion) has developed in the Treasury, almost the entire deficit forecast for 2025 in just six months.

A year ago, this deficit was five times smaller. In other words, the situation is not only bad but is also deteriorating rapidly. The deficit over five months amounted to 1.5% of the GDP, according to the Ministry of Finance.

May was the worst month in two and a half years for oil and gas revenues. This is because Russia is now selling its oil at a discount and circumventing sanctions – and has to pay the price.

But this isn’t economic growth, but rather budgetary tightening. Companies are contributing to the situation. This year, the government has forced companies to take action: it has increased profit taxes and the budget has been temporarily relaxed. But this isn’t economic growth, but rather budgetary tightening.

(MH with AnVa - Source: Moscow Times - Photo: © Unsplash)