The State Duma of the Russian Federation adopted in the first reading the government’s amendments to the federal budget for 2025, which provide for a significant increase in the deficit – more than three times – to the level recorded last year.
Previously, the Russian authorities planned to reduce the budget deficit to 1.17 trillion rubles, which would correspond to 0.5% of GDP. However, as a result of the fall in oil prices and the strengthening of the ruble, the situation worsened, forcing the Ministry of Finance of the Russian Federation to increase the deficit forecast to 3.8 trillion rubles, or 1.7% of GDP. This may lead to further use of funds from the National Welfare Fund.
The Ministry of Finance reviewed the parameters of the budget, based on the new macroeconomic forecast of the Ministry of Economic Development of the Russian Federation. In particular, it lowered the expected average annual price of Urals oil from $69.7 to $56 per barrel.
Since the beginning of the year, real oil prices have not reached the indicators laid down in the budget, and in April they have already fallen below even the new low estimate. Together with the strengthening of the ruble, this, according to the estimates of the Ministry of Finance of the Russian Federation, will lead to a reduction in oil and gas revenues by almost 25% – by 2.6 trillion rubles.
The Chairman of the Budget Committee of the State Duma, Andrei Makarov, while presenting these changes, warned about possible new threats to the Russian Federation’s oil revenues, given the risk of American secondary sanctions. He also did not rule out that the deficit at the end of the year may be even larger than indicated in the updated calculations.
“The deficit for the first four months of this year has already reached the figure (annual) that we currently accept, so it can be even higher.” Makarov admitted.
According to the Ministry of Finance of Russia, in the period from January to April, budget expenditures exceeded revenues by 3.23 trillion rubles, or 1.5% of GDP. This is three times more than the deficit originally laid down in the budget law and is almost equal to the new forecast indicators for the whole year.
