President Vladimir Putin is trying to make a bad face, but the numbers speak for themselves. According to Bloomberg, citing data from the Ministry of Finance, Russia’s budget surplus fell in August due to sanctions and a slowdown in natural gas supplies to Europe.
After the first eight months, Russia’s budget balance is in the upside of 137 billion rubles (around $ 2.1 billion). It may seem like a lot, but in just a month the surplus shrank by over 340 billion rubles, and in the middle of the year it exceeded 1.5 trillion rubles. So you can see quite a convergence in the statistics, which means that the country spends much more money than it earns.
Usually at this time of year, the Russian budget was in better shape. One of the exceptions was e.g. 2020, when the pandemic has put a strain on the state’s finances.
In August, growth in Russia’s budget revenues slowed down, while spending remained very large. It is worth emphasizing, however, that despite the sanctions, the Russian economy remains in check.
What’s the biggest problem? Russia’s energy exports are exposed to sanctions and boycottsand is currently priced below market rates.
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Russia has also slowed down its natural gas exports to Europe, its main market. This, in turn, may reduce the extraction of the raw material, as production would have to fall to meet the lower demand.
Previous unofficial reports from the Russian Ministry of Finance suggested that at the end of 2022 it would not be possible to maintain a budget surplus, and the deficit would amount to 1.7 trillion rubles.
Meanwhile, on Wednesday, the president Vladimir Putin argued that the state finances “stabilized” and in 2022 a budget surplus of around 485 billion rubles is expected – reminds Reuters.