**Russia’s Budget Deficit Hits $61 Billion**
The Russian government’s financial situation has taken a turn for the worse, with the federal budget deficit reaching 4.9 trillion rubles ($61.4 billion) by the end of July, according to the Finance Ministry. This is a sharp increase from the original planned deficit of 3.8 trillion rubles ($47.6 billion) for the year.
The deficit has already exceeded the government’s full-year target by more than 30%, and experts are warning that this could have serious implications for Russia’s economy. The Kremlin had raised defense spending to its highest level since the Cold War, which has put pressure on the budget.
**Oil Prices Take a Hit**
One of the main reasons for the deficit is a decline in oil prices. The average price of oil fell significantly last month, leading to a sharp increase in the deficit. In just seven months, Russia has already spent 25.2 trillion rubles ($316 billion) of its annual budget, with a typical end-of-year spike in spending still ahead.
Revenues have grown just 2.8% year-on-year in nominal terms, while expenditures have jumped by 20.8%. Adjusted for inflation, revenues have actually declined. Oil and gas revenues, which make up one-third of federal income, fell by 18.5% over the first seven months of this year compared to the same period last year.
**Experts Weigh In**
Russian opposition politician Vladimir Milov said that the Kremlin is depleting its reserves to cover a rising budget deficit and fund the war in Ukraine. “Investments are not coming to Russia; everything is developing only at the expense of budget funds, and budget funds are being reduced,” he told The Kyiv Independent.
US President Donald Trump also weighed in on the issue, saying that falling oil revenues may force Russian President Vladimir Putin to end the war in Ukraine.
**What’s Next?**
As the Russian government struggles to balance its books, the economic implications could be severe. The deficit has already had a significant impact on the country’s economy, and experts are warning of a potential recession.
It remains to be seen how Russia will manage its finances going forward, but one thing is clear: the budget deficit has become a major concern for the Kremlin.
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