Russia sees budget surplus again

Uneven spending and generous front-loading of large expenditures continue to affect the federal budget balance. In May, it returned to a surplus of 501 bln rubles ($5.6 bln) after posting deficit in April and surplus in March.

The overall gap between Russia’s revenues and expenditures decreased by a third, from 1.484 tln rubles ($16.6 bln) at the end of four months to 983 bln rubles at the end of five months. Relative to the size of the economy, the accumulated deficit fell from 0.8% to 0.5% of GDP.

May’s impressive surplus was formed due to a significant reduction in spending while revenues shrank less significantly. In March, federal revenues reached 3.7 tln rubles ($41.3 bln), dwindling to 3 tln in April, and only 2.6 tln in May. However, the year-on-year picture looks different due to the low base effect: in January-May 2024, revenues grew by 46%, to 14.29 tln rubles ($159.7 bln) against the same period last year.

Five-month expenditures totaled 15.27 tln rubles ($170.6 bln), or 18.9% higher than in the same period in 2023.

“For all the intense sanctions rhetoric, the Russian budget is showing a surprisingly good balance,” economist Sergei Khestanov, Associate Professor at RANEPA, says. “As long as oil prices (and oil production in Russia) remain at this level or higher, the Russian budget is not in danger.”

Previous ArticleNext Article