The Russian treasury has been hit by the reduction of oil and gas revenues and the deterioration of the economy.

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The Russian treasury has been hit by the reduction of oil and gas revenues and the deterioration of the economy.

The Russian authorities need to look for additional revenues for the treasury, which has been hit by the reduction of oil and gas revenues and the worsening situation in the economy. The head of the Federation Council Committee on Budget and Financial Markets Anatoly Artamonov said this on Wednesday, The Moscow Times reports (link to article in Russian).

The senator said measures need to be taken “urgently” as “assessments of economic indicators” have become “more pessimistic” and commodity revenues are declining.

“We need to use all available resources to increase the revenue base,” Artamonov urged. In particular, he said, it is necessary to consider the abolition of some tax benefits, the amount of which has now reached one third of the federal budget.

In addition, Artamonov continued, the level of shadow employment in Russia remains high, when individuals avoid paying income tax and contributions to social funds. We are talking, in particular, about salaries “in envelopes”, the volume of which was previously estimated by the authorities at 10 trillion rubles a year.

Also, “our persistent reluctance to deal with privatization issues is perplexing,” the senator said, adding that all the measures he listed are “reserves to replenish the budget” (quoted by Interfax).

Money is increasingly needed by the federal treasury, which spends every third ruble on the war - a record share since the Soviet Union. According to the Ministry of Finance, oil and gas revenues fell by 17% in the first half of this year, while total revenues grew by only 3%, meaning that in real terms (adjusted for inflation) they began to shrink. At the same time, expenditures jumped by 20%. As a result, in six months the budget has a “hole” of 3.7 trillion rubles - 6 times more than in the same period a year ago.

Reserves for patching budget “holes” are nearing exhaustion: the liquid assets of the National Welfare Fund, which before the war reached $120 billion, by July 1, 2025 reduced to $52.6 billion, that is, almost 2.5 times. If oil prices remain low, this reserve will be completely used up as early as next year, economists at the Russian Academy of National Economy and Public Administration warned.

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  • Saleh@feddit.orgEnglish
    31·
    19 hours ago

    These numbers are not reflecting the federal budget. The article is referring to Russias federal budget. Your numbers include all public spending, mostly retirement and healthcare which aren’t financed through the federal budgets. For Germany for instance it is run on mandatory pension and health insurance, cross financed in part from the federal budget.

    Money is increasingly needed by the federal treasury, which spends every third ruble on the war

    Going off the linked explainer in wikipedia https://en.wikipedia.org/wiki/Government_expenditure

    Public expenditures represented 46.7 percent of total GDP of the European Union in 2018. Countries with the highest percentage of public expenditure were France and Finland with 56 and 53 percent, respectively. The lowest percentage had Ireland with only 25 percent of its GDP. Among the countries of the European Union, the most important function in public expenditure is social protection. Almost 20 percent of GDP of European Union went to social protection in 2018. The highest ratio had Finland and France, both around 24 percent of their GDPs. The country with least social protection expenditure as percent of its GDP was Ireland with 9 percent. The second largest function in public expenditure is expenditure on health. The general government expenditure on health in European Union was over 7 percent of GDP in 2018. The country with highest share of health expenditure in 2018 Denmark with 8.4 percent. The least percentage had Cyprus with 2.7 percent. General public services had 6 percent of total GDP of European Union in 2018, Education around 4.6 percent and all other categories had less than 4.5 percent of the GDP.

    Germanys federal budget is 476 billion euro in 2024 Germanys 2024 GDP is at 4.3 trillion Euro.

    5% of 4.3 trillion is 215 billion. 215 billion is 45% of 476 billion, so even if the budget is increased significantly, these 5% GDP would correspond to a third or even more of the federal budget and be similar to Russias war economy spending.

    • Szewek@sopuli.xyzEnglish
      1·
      12 hours ago

      I think the difference is that, while both Russia and Germany are federations on paper, Germany is much less centralized.

      • to the best of my knowledge, 3.5% would be military spending, and 1.5% could be other “defence” spending (as others have already written).

      Still, not fun with the 3.5%/5%. Overshooting, typical for “weapons as war repellent” strategy (and unfortunately, expanded military often does not want to stay idle…)