Russia’s budget deficit widens in early ’25

Russia’s budget deficit reached 1.3 per cent of GDP, or 2.70 trillion roubles ($31.45 billion), in the first two months of 2025, as government spending surged, the finance ministry said Tuesday according to Reuters.

Spending jumped 30.6 per cent year-on-year to 8.05 trillion roubles, while revenues rose 6.3 per cent to 5.34 trillion roubles, driven by an 11.1 per cent increase in non-oil and gas revenues.

The ministry attributed early spending to advance payments but maintained its 2025 deficit target of 0.5 per cent of GDP.

Russia’s deficit was 1.7 per cent of GDP in 2024, with rising military expenditures fuelling inflation.

The central bank, citing fiscal stimulus as a key risk, kept interest rates at 21 per cent last month, with Governor Elvira Nabiullina stressing the need for budget discipline.

Attribution: Reuters

Subediting: M. S. Salama