The Russian budget returned to surplus


The surplus of the Russian budget became one of the largest monthly indicators this year.

The Russian budget returned to a surplus in August / photo

Last month, the Russian budget turned positive again, despite falling oil revenues.

According to calculations Bloombergbased on data from the Russian Ministry of Finance, the surplus in August reached almost 456 billion rubles ($4.7 billion) and became one of the largest monthly figures this year.

“Russia’s budget is still under the pressure of financial losses caused by the war in Ukraine. However, the August budget figures helped to reduce the deficit for the first eight months to 2.4 trillion rubles, or 1.5% of the gross domestic product,” the publication writes .

It is noted that sanctions and other restrictions imposed by the US and its allies in connection with Russia’s invasion of Ukraine have hit the country’s revenues from energy exports. The Kremlin’s oil and natural gas revenues also fell in August due to subsidies to national refineries.

At the same time, Russia’s budget balance benefited from the recovery of domestic demand, the weakening of the ruble and the slowdown in spending in August.

“The weakening of the national currency helps reduce the budget deficit by increasing the revenues that the government receives from oil exports in ruble terms. In August, the ruble lost about 4% against the dollar, one of the worst performers in emerging markets. According to Bloomberg Economics, a decrease in the rate of the American currency by just one ruble will lead to additional windfalls to the budget in the amount of 120 billion rubles, adjusted for a 12-month period,” the publication notes.

What is happening in the Russian economy

The Russian ruble went into sharp decline and on August 9 entered the top three weakest currencies in the world. In seven months of 2023, the ruble lost 57% against the dollar.

On August 16, the media reported that Moscow was preparing emergency restrictions to support the ruble. The media also noted that due to the collapse of the ruble, Putin will have to choose between war and saving his economy.

Against the background of the collapse of the economy, Russians began to save on food. According to official Rosstat data, in 2022 the reduction in the main product groups was up to 22% compared to 2021, while spending on products increased by almost 30%.

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