Russia Cuts Budget Deficit to $3.7 Billion Amid Economic Growth and Rising Oil Revenues

Russia has successfully narrowed its budget deficit to $3.7 billion, or 0.2% of its GDP, in the first eight months of 2024. This improvement is attributed to unexpected economic growth and increased oil and gas revenues, which have bolstered government finances amid ongoing military expenditures due to the conflict in Ukraine. The Finance Ministry's data reveals that in August, Russia recorded a budget surplus of $8.5 billion, primarily driven by significant revenue increases from non-oil and gas sectors. Despite a 22% rise in total budget spending, revenues surged by 36% compared to the previous year, indicating a resilient economic response to international sanctions and war demands. Finance Minister Anton Siluanov highlighted that GDP is projected to grow by 3.9% this year, offering the government additional leeway for spending. Russia aims for a budget deficit of 2.1 trillion rubles (1.1% of GDP) this year, continuing its trend of deficit financing since the war began in February 2022.