MOSCOW (Reuters) -Russia’s Finance Ministry raised the 2025 budget deficit estimate to 1.7% of gross domestic product (GDP) on Wednesday from 0.5% after reducing the energy revenues forecast by 24% due to expectation of a prolonged period of low oil prices.
The ministry lowered the 2025 oil and gas revenues forecast to 8.32 trillion roubles ($101.47 billion) or 3.7% of GDP from 10.94 trillion roubles or 5.1% of GDP. It also increased the spending by 830 billion roubles.
Russia already hiked state spending on national defence by a quarter in 2025 to 6.3% of gross domestic product (GDP), the highest level since the Cold War. Finance Minister Anton Siluanov said defence spending will not be touched.
“The budget priorities remain unchanged. These are social support for citizens, funding for the defence and security of the state, support for families of participants in the special military operation,” he said in comments on the increase.
Oil and gas revenue is a crucial source of cash for the Kremlin, accounting for about a third to a half of total federal budget proceeds over the past decade.
The slowdown of the global economy as the result of trade wars is hitting demand for oil and pushing down its price, which fell by more than 11% in April.
The announcement followed a revision of the average price of oil used in 2025 budget calculations to $56 per barrel from $69.7 previously but Siluanov insisted the spending plans will not be affected.
“Everything planned in the budget, including the implementation of national development goals, will be carried out regardless of external conditions and factors,” he added.
($1 = 81.9955 roubles)
(Reporting by Darya Korsunskaya; Writing by Ksenia Orlova and Gleb Bryanski; Editing by Sandra Maler)
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