![]() The most serious drop was seen in internal VAT and profit tax payments, though it’s primarily a technical issue linked to changes in the collection of those taxes.īudget spending grew a record 58.7 percent to 3.1 trillion rubles. Non-oil and gas revenues also decreased: by 28 percent down to 931 billion rubles. For now, the government can close the gap by borrowing and tapping the National Wealth Fund, Russia’s sovereign wealth fund. ![]() Income from oil and gas decreased to 426 billion rubles, the lowest level since 2020, because of a fall in the price of Urals crude (to $49 per barrel in January: 40 percent cheaper than Brent, while the budget is calculated based on a price of $70), and also a decline in gas exports. The Finance Ministry has offered several reasons for January’s revenues falling by 35 percent. That’s not to say that the Russian economy has fully adapted to the new conditions and has stopped feeling the effect of sanctions altogether, simply that their effect will be a drawn-out one. ![]() Major spending in January may make it possible to economize in coming months. Despite wide-ranging sanctions, the Kremlin still has plenty of opportunities to export hydrocarbons, and the country’s economic life is gradually returning to normal. Yet it would be premature to write off the Russian economy based on the figures from a single month. Spending grew by 58 percent compared with January 2022, when there was a budget surplus of 125 billion rubles ($25 billion), while revenues fell by over a third. The first month of 2023 saw the deficit reach a record 1.8 trillion rubles. January’s figures for Russian budget spending look so alarming that they have prompted talk of the impending collapse of the economy.
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