In January, Russia's state budget deficit reached 1.718 trillion rubles, nearly half of the annual deficit target, primarily due to a sharp decline in energy revenues.
In January, Russia reported a state budget deficit of 1.718 trillion rubles (approximately $22.3 billion), which amounts to nearly 50% of the country's total annual deficit target. The Ministry of Finance attributed this significant shortfall to a drastic drop in energy-related revenues, highlighting the vulnerability of the budget to fluctuations in this sector. Against the backdrop of these troubling figures, the overall budget revenues were reported at 2.362 trillion rubles, which reflects an 11.6% decrease compared to the previous year.
The hardest hit area was the income from oil and gas sectors, which plunged by half to a five-year low of 393 billion rubles. This downturn raises concerns for the broader Russian economy, heavily reliant on energy exports. However, tax revenues unrelated to the energy sector showed a positive trend, increasing by 4.5% to 1.969 trillion rubles. This was fueled by a remarkable rise in value-added tax (VAT) collections, which surged nearly a quarter to 1.13 trillion rubles following a hike in the VAT rate to 22% at the beginning of the year.
Despite the increase in non-energy tax revenues, they were insufficient to offset the significant decline in energy incomes. While the Ministry of Finance managed to reduce government expenditures by 1.4% to 4.08 trillion rubles, the deficit for January was already greater than the same month of the previous year, indicating ongoing fiscal pressure and highlighting the need for more sustainable budgetary practices moving forward.
