Russia's budget deficit reached $57 billion despite rising oil prices

The Russian Federation’s federal budget deficit for January through October reached 5.23 trillion rubles ($57 billion), which amounts to 2.3% of GDP and significantly exceeds the initial annual target of 3.6 trillion rubles ($39 billion). 

Despite rising prices for Russian oil, the gap between expenditures and revenues has grown by 48 billion rubles ($520 million) over the past month. This is evidenced by data from the Russian Ministry of Finance and estimates by financial experts. 

The rapid widening of the budget deficit is driven by a massive increase in military spending, to which the Kremlin has already allocated 47 trillion rubles ($510 billion) for 2022–2025, and has allocated an additional 50 trillion rubles ($545 billion) in the draft budget for the coming years.

Source: The Moscow Times, citing the Russian Ministry of Finance.

Russia plans to increase fines on businesses to replenish the war budget.

In St. Petersburg, due to the budget crisis, payments for recruiting soldiers for the war have been cut by nearly nine times.

As a reminder, consumer sentiment in Russia is rapidly deteriorating, confidence in the economy is declining, and anxiety is rising. This was reported by the Foreign Intelligence Service of Ukraine. Consumer lending in Russia has fallen to a six-year low.

After three years of unexpected economic growth, Russia is facing a sudden slowdown—war expenses, inflation, and falling oil prices have begun to weigh on an economy that, until recently, seemed resilient to sanctions.