The Russian federal budget deficit reached 5.8 trillion rubles in January-August
The Russian Ministry of Finance has postponed a portion of budget expenditures and cut funding for civilian categories to prioritize military needs. According to Finance Minister Anton Siluanov, defense tasks remain the primary focus. This was reported by The Moscow Times citing Reuters, according to the portal PromPolitInform.
The head of the Russian agency emphasized that addressing financial challenges required working with both expenditures and the resource base. The ministry developed a series of measures early in the year and subsequently prepared additional steps for fiscal consolidation.
Funding defense requirements
Initially, the budget for the current year projected a deficit of 3.7 trillion rubles, or 1.6% of GDP. However, by the end of the first quarter, the financial gap exceeded the annual plan, and due to reallocated funds for military purposes, it could have reached 9 trillion rubles.
To curb the growing deficit, the ministry reduced civilian spending by a third. In addition, officials issued a directive to regional authorities to cut the number of public sector employees and civil servants by 15%.
Expanding budget deficit
As of late August, the federal budget deficit reached 5.8 trillion rubles, accounting for 2.5% of GDP. Anton Siluanov confirmed that the figure will continue to grow due to additional financing requirements.
«We expect the deficit to be larger than planned, but it will remain within 3% of GDP», Siluanov said.
The government plans to cover the deficit by utilizing accumulated account balances and borrowing on the debt market.
Record military spending
The original budget law allocated 12.9 trillion rubles for national defense. Actual war expenditures in the first half of the year alone reached 10.687 trillion rubles, according to calculations by Janis Kluge from the German Institute for International and Security Affairs.
Compared to the same period last year, funding for the army increased by 30%. Cumulatively since the beginning of 2022, more than 57 trillion rubles have been spent on military needs.
Illustrative photo: Ministry of Defence / GODL-India
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