Russia’s budget deficit jumped in the first two months of the year, but spending shows signs of slower growth amid the war in Ukraine.
Writes about it Bloomberg with reference to the data of the Ministry of Finance of the Russian Federation.
It is emphasized that the deficit reached 2.58 trillion rubles (34 billion dollars), while the costs amounted to 5.74 trillion rubles.
“Although the ministry has not released monthly totals, spending in February appears to have dropped from 3.12 trillion rubles in January.
Although the budget is in deep red, the ministry said it is continuing to stick to the plan to keep the year-end deficit within its target. It blamed this year’s surge in spending on this year’s significant upfront spending.
“The main reason for the deficit reduction is a 15% drop in government spending after extremely large spending in the first month of the year. However, Moscow will find it difficult to balance its accounts as domestic government bond yields soar above 11% and non-oil revenues continue to decline,” said Russian economist Alexander Isakov.
Sanctions and other restrictions imposed by the US and its allies over Russia’s invasion of Ukraine have hit the country’s energy export earnings hard as the restrictions went into effect over the past few months.
Non-energy revenues fell 9%, less than 28% in January. Bloomberg Economics expects that the federal budget deficit of the Russian Federation this year will be 3-4% of GDP.
Recall:
Russia’s oil and gas revenues in February amounted to 521 billion rubles compared to 424 billion rubles in January – in 2 months they amounted to 947 billion rubles and decreased by 46.4% in annual terms.
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