Russia's Money Woes: A Look at the 2025 Budget Deficit

Russia's 2025 budget deficit hit a significant 2. 6% of GDP, the largest gap since 2020. This means the country spent more than it earned, leading to a shortfall of 5. 6 trillion roubles. To put that into perspective, that's about $72. 12 billion. The main reason for this deficit? Oil and gas revenues took a big hit, dropping by 24%. This sector is crucial for Russia's economy, so when it struggles, the whole budget feels the pinch. Despite efforts to boost other taxes, like corporate profits and personal income, it wasn't enough to make up the difference. Spending also played a role. The government spent 6. 8% more than in 2024, and 3. 5% more than originally planned. This increase, combined with the drop in oil revenues, created a perfect storm for the deficit.The government had initially set a modest deficit target of 0. 5% of GDP, but they had to revise it twice due to the economic challenges. They even raised the value-added tax to try to keep the deficit in check for the following year. However, with oil prices below the expected $59 per barrel, analysts are skeptical about whether the government can meet its targets. This situation highlights the delicate balance between spending and revenue, especially for countries heavily reliant on energy exports. It's a reminder of how global market fluctuations can impact national budgets.