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Russia. Russia’s budget in worse shape, deficit in January 2023 – preliminary data of the Ministry of Finance

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Declining revenues from energy sales and soaring spending caused Russia’s budget to run into a deficit of 1.76 trillion rubles, or $24.78 billion, in January. This is according to the preliminary data of the local Ministry of Finance, which was published on Monday.

The Russian Ministry of Finance, citing preliminary data, reported that revenues from oil and gas sales in January this year were by 46.4 percent lower than in the same month last year, and amounted to 426 billion rubles. The reason is e.g. lower price of Russian Urals oil.

As a result of the sanctions, Moscow was forced to sell energy at a large discount. The average price of Russian Urals oil in January was $49.48 a barrel, down 42 percent from a year ago. compared to January 2022, the Ministry of Finance reported.

Overall, budget revenues fell by 35.1% last month. Every year. On the other hand, expenses were higher by 58.7 percent, reaching 3.12 trillion rubles.

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Russia’s budget

Reuters pointed out that Moscow, which relies on oil and gas revenues to fund its budget spending, has been forced to start selling foreign currency reserves to cover a deficit stretched by costs conflict in Ukraine. Last year, revenues from the sale of oil and gas amounted to about 11.6 trillion rubles.

Reuters noted that while some Russian politicians are trying to downplay the effectiveness of price caps and an embargo on Russian energy exports, Finance Minister Anton Siluanov admitted last year that a price cap on Russian oil could increase budget deficit in 2023.

Main photo source: YURI KOCHETKOV/EPA/PAP

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