Published by Global Banking & Finance Review®
Posted on March 11, 2025
2 min readLast updated: January 24, 2026
Add as preferred source on GoogleRussia's budget deficit hit $31.5 billion in early 2025, driven by high spending and military investments, impacting GDP.
By Darya Korsunskaya and Alexander Marrow
(Reuters) - Russia's budget deficit widened to 1.3% of gross domestic product (GDP) in the first two months of 2025, or 2.70 trillion roubles ($31.45 billion), the finance ministry said on Tuesday, as government spending remained elevated.
The finance ministry puts this year's early spending spree down to the advance payment of contracts that it says will not affect its target for a 2025 deficit of 0.5% of GDP.
Russia's deficit for the first two months of 2024 was 1.13 billion roubles, or 0.6% of GDP.
For January-February 2025, spending was 8.05 trillion roubles, 30.6% higher year-on-year, the finance ministry's preliminary data showed.
Budget revenues were 5.34 trillion roubles, up 6.3% year-on- year, led by non-oil and gas revenues, which climbed 11.1% to 3.78 trillion roubles.
Russia's 2024 fiscal shortfall was around $34 billion, or 1.7% of GDP. Spending has jumped in the last three years, with Moscow channeling funds into its military and defence sector as it prosecutes its February 2022 invasion of Ukraine, spurring stubbornly high inflation.
The central bank regularly cites huge fiscal stimulus as a factor that forces it to keep interest rates high.
When holding interest rates at 21% last month, Governor Elvira Nabiullina said it was very important that the government sticks to its plans for the budget deficit.
($1 = 85.8500 roubles)
(Reporting by Darya Korsunskaya and Alexander Marrow; Editing by Andrew Heavens and Gareth Jones)
Russia's budget deficit for the first two months of 2025 reached 2.70 trillion roubles, equivalent to $31.45 billion, which is 1.3% of its GDP.
The finance ministry attributed the increased deficit to an early spending spree, including advance payments on contracts, while maintaining a target deficit of 0.5% of GDP for 2025.
For January-February 2025, budget revenues were 5.34 trillion roubles, which is a 6.3% increase year-on-year, primarily driven by a rise in non-oil and gas revenues.
Russia's fiscal shortfall for the year 2024 was approximately $34 billion, or 1.7% of GDP, indicating a trend of increasing spending over the past three years.
The central bank of Russia has maintained an interest rate of 21%, citing the significant fiscal stimulus as a reason for keeping rates high.
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