Projected budget shortfall anticipated at 3.2 million rubles by the Finance Ministry

In stark contrast to the same period last year, Russia's budget deficit has skyrocketed by a staggering 2.085 trillion rubles. By April 2024, the deficit hovered at a substantial 1.14 trillion rubles, which translates to 0.6% of the country's GDP.

According to the Ministry of Finance, spending shot up by a whopping 20.8% year-on-year, reaching nearly 15.5 trillion rubles, while revenues saw a more modest increase of 5% to 12.274 trillion rubles. Notably, oil and gas earnings plunged by 10.3%, amounting to just 3.727 trillion rubles. This unsettling trend has been credited to a tumble in global oil prices—Urals crude dropping from around $70 per barrel in January to a meager $54 in April, with prices at Russian ports hitting even lower levels in early May. The Ministry of Finance issued a warning of potential further risks if the situation persists [2].

The steep rise in spending, along with comparatively slower growth in non-oil revenue (up 13.5% on non-oil and non-gas revenues and 5% overall), has culminated in a wider budget deficit. Approximately one-third of the budget is allocated for military and war-related expenses [1][2].

The law on the federal budget for 2025 and the planning period 2026-2027 initially estimated the budget deficit for 2025 at 1.17 trillion rubles. However, following economic fluctuations, the Ministry of Finance proposed amendments that were subsequently approved, resulting in an adjusted federal budget deficit of 3.79 trillion rubles for 2025 [1][3].

By the end of the first quarter of 2025, the budget deficit stood at a hefty 2.2 trillion rubles, as revealed by Russian President Vladimir Putin at a meeting on economic issues on April 24. Putin attributed this trend to a deliberate shift in expenses to the beginning of the year, so that all economic entities and government agencies can take timely action to maintain a steady work pace throughout the year [3].

Preliminary data from the Ministry of Finance suggests that the federal budget deficit for 2024 amounted to 3.485 trillion rubles or 1.7% of GDP [4].

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Insights on the Causes of the 2024 Budget Deficit Increase

The dramatic increase in Russia's federal budget deficit by around 3.2–3.5 trillion rubles (or roughly 1.5% of GDP) in the initial four months compared to the same timeframe in 2023 can largely be attributed to two critical factors:

Decrease in Oil and Gas Revenues: Oil and gas revenues plummeted by 10% year-over-year in the first four months of 2024, totaling 3.76 trillion rubles, in contrast to the previous year. The root cause is a significant drop in global oil prices—Urals crude declined from above $70 per barrel in January to approximately $54 in April, with prices at Russian ports even lower in early May. The Ministry of Finance has hinted at potential additional risks if these trends persist [2].
Surge in Government Spending: Expenditures surged by 20–21% year-over-year, reaching 15.5 trillion rubles in the same period. Approximately one-third of the budget is earmarked for military and war-related expenses. This substantial increase in spending, coupled with slower growth in non-oil revenue (up 13.5% for non-oil and non-gas revenues and 5% overall), has expanded the deficit [1][2].

Official Deficit Estimates and Targets

2024

Actual Deficit: Russia recorded a government budget deficit of 1.7% of GDP in 2024 [1].
Deficit Value: The deficit at the close of 2024 was about 1.7% of GDP, although specific ruble values may vary by month and reporting period [1][3].

2025 and Beyond

2025 Target: The budget law for 2025 initially aimed for a deficit of 0.5% of GDP (approximately 1.17 trillion rubles), but the Ministry of Finance later revised the estimate to 1.7% of GDP due to lower oil and gas revenue forecasts [1][3].
2026 and 2027: The search results do not provide explicit official deficit projections for 2026 and 2027 according to the law on the federal budget. However, based on recent trends, the government is likely to maintain a prudent approach, assuming ongoing macroeconomic and geopolitical risks, and may keep the deficit around 1–1.5% of GDP unless oil prices recover or expenses are further reined in. Official targets for these years should be confirmed in the respective budget laws, but were not specified in the provided sources [1][3].

Summary Table

| Year | Budget Deficit (as % GDP) | Notes and Adjustments ||---------|--------------------------|-----------------------|| 2023 (same period) | ~0.6% (for Jan–Apr) | Baseline for comparison || 2024 (actual) | 1.7% (for full year) | Deficit widened due to low oil prices and high spending [1] || 2025 (initial target) | 0.5% (revised to 1.7%) | Revised after oil price fall [1][3] || 2026–2027 | Not specified | No official figures in sources; likely in the 1–1.5% range unless conditions change [1][3] |

Key Takeaways

The deficit increase in 2024 is primarily due to a precipitous fall in oil and gas revenues and a sharp spike in government spending.
For 2025, the deficit is officially projected at 1.7% of GDP, revised upward from 0.5%.
Deficit projections for 2026 and 2027 are not provided in the sources, but are expected to remain elevated if current trends persist. [1][2][3]

The steep increase in government spending and the decrease in oil and gas revenues are the primary factors contributing to the dramatic expansion of Russia's federal budget deficit by approximately 1.5% of GDP in the initial four months of 2024, compared to the same period in 2023. This trend has been observed in the surge in expenditures, which grew by over 20%, and the decline in oil and gas revenues, which plummeted by 10%. These factors have resulted in an expanded budget deficit in the energy sector, straining the industry's financial resources.