MOSCOW (Reuters) – Russia’s budget deficit remained flat at 0.5% of gross domestic product (GDP) in June, the same as in May, as growth in non-oil and gas revenues offset spending, the finance ministry said on Tuesday.
At the same period of last year, the budget deficit was more than twice as large, at 1.4% of GDP, as Western sanctions over the conflict in Ukraine that included an oil price cap and oil embargo squeezed Russia’s energy revenues in early 2023.
Revenues for the first six months of the year were 38% higher than the same period of 2023, the ministry said, citing preliminary data. Oil and gas revenues were 68.5% higher and non-oil and gas revenues were up 26.6%.
The ministry said it saw “sustainable positive dynamics” in key non-oil and gas revenue sources, including value-added tax (VAT). It said that growth in VAT and other turnover taxes created conditions for a further increase in non-oil and gas revenues later this year.
Moscow expects budget revenues and expenditure to sharply increase this year. The finance ministry tweaked its budget plan for 2024 in early June, now expecting to spend more and see slightly lower energy revenues to leave a full-year deficit of 1.1% of GDP, or 2.12 trillion roubles ($23.81 billion).
The ministry plans to spend 37.18 trillion roubles over the year and attract 35.06 trillion in revenues. Spending in January-June was 22.3% higher than in the same period of 2023.
Since the launch of what Russia calls a “special military operation” in Ukraine, the budget deficit has exceeded 3 trillion roubles for two years running, covered by internal borrowing and spending from its rainy-day fund of excess energy revenues.
(Reporting by Darya Korsunskaya and Gleb Bryanski; Editing by Alexander Marrow and Peter Graff)
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