Russia's budget deficit rises, exceeding annual target by 1.5 times

Russia's federal budget deficit has increased significantly, exceeding its annual target by one and a half times.

Source: The Moscow Times, citing data from Russia's Finance Ministry

Details: The budget shortfall for January-April amounted to RUB 5.88 trillion (about US$78.9 billion or 2.5% of GDP), nearly RUB 3 trillion (US$40 billion) higher than in the same period last year and RUB 1.3 trillion (US$17.5 billion) more than in January-March.

The annual plan envisages a deficit of RUB 3.79 trillion (US$50.9 billion or 1.6% of GDP).

Non-oil and gas revenues have risen by 10.2% since the start of the year compared to last year, reaching RUB 9.42 trillion (US$126.5 billion). However, total revenues declined by 4.5% to RUB 11.72 trillion (US$157.4 billion) due to a 38.3% drop in oil and gas revenues.

Expenditure increased by 15.7% year-on-year to RUB 17.6 trillion (US$236.4 billion), reaching 40% of the annual target.

According to the outlet, economists doubt that Russia's Finance Ministry will be able to keep spending within the planned limits, expecting new tax initiatives.

Background:

• Reuters previously reported, citing a think tank close to the Russian government, that high global oil prices are unlikely to boost Russia's economic growth this year, as Ukrainian drone strikes and new Western sanctions are putting pressure on oil production and exports.
• Oil and gas revenues in Russia's budget have also fallen short of expectations despite rising oil prices.

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