The Russian State Duma approved in the first reading the government’s amendments to the federal budget for 2025, which provide for a more than threefold increase in the budget deficit to last year’s level.

This is reported by The Moscow Times.

This year , the Russian government reportedly expected to reduce the budget deficit to 1.17 trillion rubles, or 0.5% of GDP.

However, cheap oil and a strong ruble have created a “perfect storm,” forcing the Russian Finance Ministry to increase its budget deficit estimate to 3.8 trillion rubles, 1.7% of GDP, which could mean continued spending from the National Welfare Fund.

The Ministry of Finance of the Russian Federation prepared changes to the country’s main financial plan based on a new macro forecast from the Russian Ministry of Economic Development, which, in particular, provides for a significant decrease in the forecast average annual price of Urals oil – to $56 per barrel from the budgeted $69.7 per barrel.

Since the beginning of the year, the actual price has not reached the budgeted level, and in April it was already lower than the authorities’ new estimate. Together with the stronger ruble, this will, according to the calculations of the Russian Ministry of Finance, lead to a reduction in oil and gas revenues by almost a quarter of the plan – by 2.6 trillion rubles.

The head of the budget committee of the Russian State Duma, Andrei Makarov, who presented the amendments to the law, warned of new risks for Russia’s oil revenues amid the threat of US secondary sanctions and suggested that the hole in the treasury at the end of the year could be even higher than envisaged in the amendments.

“The deficit for the first four months of this year has already reached the (annual) figure that we are currently accepting, so it could be larger,” Makarov admitted.

According to the Russian Ministry of Finance, in January-April, expenditures exceeded revenues by 3.23 trillion rubles, or 1.5% of GDP, three times exceeding the planned deficit set in the budget law and almost equal to the new annual estimates .

It was previously reported that Russian officials are beginning to publicly express concern about the situation in the economy, which slowed sharply at the beginning of this year, and in quarterly terms began to decline for the first time since the spring of 2022.

Earlier, it was reported that the pace of economic growth in Russia had slowed down sharply . Thus, Russia’s GDP grew by 1.7% in January-March of this year – 2.6 times less than in the previous quarter (4.5%).

Previously, the Central Bank of the Russian Federation stated that the Russian economy will slow down its growth rate to almost zero in 2025 , inflation will exceed initial forecasts by one and a half times, and supplies of imported goods will continue to decline.

In addition, it became known that  Russia’s revenues from oil and gas sales in April this year fell by approximately 12% compared to the same month last year.

Against this background, Russia is considering the possibility of forced reductions in federal budget expenditures due to falling oil and gas revenues.

Author:  Halyna Yalivets Джерело: https://censor.net/n3554919

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