Russia's budget deficit has risen sharply due to a surge in government spending – Bloomberg
Russia's federal budget posted a deficit of 724 billion rubles ($8.8 billion) in July, following a surplus the previous month. For the first seven months of the year, the cumulative budget deficit reached 6.5 trillion rubles, or 2.8% of GDP.
This sharp increase occurred despite oil tax revenues reaching a 15-month high due to tensions surrounding the Strait of Hormuz and the high price of Urals crude.
The main reason for the deficit’s growth was a sharp increase in government spending, particularly on the war against Ukraine. Total spending for the first seven months reached 28.6 trillion rubles, while spending on government procurement rose by 39% (to 8.4 trillion rubles), exceeding 80% of the annual plan. The deterioration in budget indicators is occurring against the backdrop of a slowdown in the Russian economy under pressure from high interest rates.
This was reported by Bloomberg.
As a reminder, consumer sentiment in Russia is rapidly deteriorating, confidence in the economy is declining, and anxiety is growing over a possible new wave of mobilization. This was reported by the Foreign Intelligence Service of Ukraine.
After three years of unexpected economic growth, Russia is facing a sudden slowdown—war costs, inflation, and falling oil prices have begun to weigh on an economy that until recently seemed resilient to sanctions.
Consumer lending in Russia has fallen to a six-year low.
