MOSCOW (Pakistan Point News / Sputnik - 08th August, 2023) Russia's budget deficit in 2023 may stand at 3.5%-4.5% of GDP as oil and gas revenues have been impacted by Western sanctions, Andrei Nechayev, who served as Russia's economy minister from 1992 to 1993, told Sputnik.
The law on the Federal budget for 2023 projects its deficit at 2% of GDP. Meanwhile, Russian Finance Minister Anton Siluanov said in July that the deficit of the Russian state budget would amount to 2%-2.5% of GDP in 2023, adding that Russia has enough resources to meet the planned and additional budget expenditures that may arise during the year.
"Budget deficit will reach, I think, 3.5%-4.5% of GDP by year-end," Nechayev said.
Until recently, oil and gas revenues made up over half of Russia's budget income, but oil sales plunged by 40% in the past year, with gas revenues dropping even more, the ex-minister said.
As Western markets are largely closed to Russia due to sanctions, the government has turned to the National Wealth Fund and domestic borrowing to manage the budget deficit, Nechayev said.
According to official estimates, over 6% of the state budget will be allocated to debt servicing in 2025, the ex-minister said, adding that the government may have to trim spending.
