Russia's Budget Deficit Expands to 1.5% of GDP Amid Spending Surge
MOSCOW (Reuters) -Russia ran a budget deficit of 3.2 trillion roubles ($39.6 billion), or 1.5% of gross domestic product, in the first four months of the year, the finance ministry said on Wednesday, citing preliminary data.
The figure compares with a deficit of 0.6% of GDP in the same period of last year. The ministry said that advance payments to finance budget expenditure in January were behind the increase.
"This is mainly due to the accelerated financing of expenses in January of this year, as well as the decrease in oil and gas revenue inflows, but it will not affect the execution of the target parameters of the structural balance for the year 2025 overall," a ministry statement said.
Fiscal expenditure grew by 21% in year-on-year terms in the four months to 15.5 trillion roubles, making up 36.6% of the full year spending plan. Budget revenues for the same period grew by 5%.
The budget's oil and gas revenues fell by 10.3% compared to the same period of last year due to lower oil prices, while revenues outside the energy sector grew by 13.5%.
Russia's finance ministry raised the 2025 budget deficit estimate to 1.7% of gross domestic product (GDP) on Wednesday from 0.5%, after reducing the energy revenues forecast by 24% due to expectations of a prolonged period of low oil prices.
Increased spending to finance the military operation in Ukraine has kept the budget deficit close to 2% of GDP over the last three years. The accelerated budget spending has also fuelled inflation.
($1 = 80.8205 roubles)
(Reporting by Darya Korsunskaya; Editing by Andrew Osborn, Chizu Nomiyama, William Maclean)
