UK Intelligence: Russia faces growing budget deficit amid falling oil prices

The UK intelligence service has said that the sharp decline in oil prices threatens Russia's ability to finance its planned budget for 2025.

Source: UK Defence Intelligence review dated 7 May on X (Twitter), as reported by European Pravda

Details: UK intelligence notes that due to worsening price expectations, the Russian Ministry of Finance has reduced its expected oil and gas revenues by 25%, from 10.94 trillion to 8.32 trillion roubles (from US$135 billion to US$103 billion).

However, the expected budget deficit has tripled, going from 0.5% to 1.7% of GDP.

Despite this, the intelligence community writes that Russia prioritises high military spending to the detriment of economic stability.

They pointed out that the Russian authorities have increased the prognosis for public spending for 2025 by another 830 billion roubles (about US$10.2 billion).

The UK intelligence service says that if low oil prices persist, Moscow will likely be forced to use its financial reserves even more to support government spending.

Background:

• UK intelligence pointed to a trend of further increases in the number of Russian casualties in the war against Ukraine in 2025.
• The intelligence also described how Russia is recruiting foreigners to join its armed forces to participate in the war it has unleashed against Ukraine.

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