Russia’s federal budget moved back into a deficit in April after a surplus in March, according to a report by Kommersant summarizing data from the Ministry of Finance. The monthly shift underscores how fiscal dynamics can swing within a single quarter and how early-year spending patterns influence short-term balance.
From the start of the year up to the end of April, the gap between incomes and expenditures widened markedly. The cumulative deficit increased nearly 2.5 times, rising from 607 billion rubles at the close of March to 1.484 trillion rubles by the end of April 2024. This acceleration in the deficit reflects a combination of slower revenue growth in April and renewed, higher outlays compared with March, rather than a sudden collapse in revenue streams alone.
Despite a 50 percent year-on-year rise in overall revenues reaching about 11.7 trillion rubles by the end of April, the monthly deficit of 877 billion rubles signals a pattern where expenses grew faster than incomes in the fourth month. The finance ministry attributed the April deficit to intensified spending driven by ongoing early-year activity and a continuation of what it termed the preliminary season of budget execution, where authorities front-load certain expenditures and contracts at the start of the year.
By the end of the four-month period, total expenditures stood at roughly 13.2 trillion rubles, surpassing the same four-month period in 2023 by about 21.5 percent. Officials described the financing as accelerated in February through April, with more rapid contract conclusions and advance payments aimed at securing critical purchases and services. This acceleration created a higher cumulative outlay that outpaced revenue growth and contributed to the monthly deficit observed in April.
On the revenue side, the year-to-date performance shows resilience in both non-oil and gas sectors and oil and gas sectors. Non-oil and gas revenues reached around 7.5 trillion rubles, an increase of roughly 37 percent compared with January–April of the previous year. Within this segment, VAT collection rose to about 4.4 trillion rubles, up approximately 27 percent, highlighting steady consumer and enterprise activity contributing to tax inflows. Meanwhile, oil and gas revenues rose sharply by about 82 percent to roughly 4.2 trillion rubles, supported by prior-year payments and the first-quarter performance that matters for this sector. This balance between differing revenue streams reflects the complexity of Russia’s fiscal structure, where the oil and gas sector remains a core, volatile driver of public finances, while domestic tax channels provide more stable, but still cyclical, support.
Economists had previously warned about the potential consequences of removing or significantly reducing personal income tax for lower-income Russians, noting a risk of reduced consumer spending power and altered revenue dynamics. While the state pivoted to maintain essential services and public investment, the policy landscape and macroeconomic conditions remained under close scrutiny as the year progressed. Analysts emphasized that the interaction between tax policy, commodity prices, and the pace of budget execution would continue to shape the fiscal path in the near term, with attention to how widened deficits might influence borrowing costs and debt dynamics.
The broader international context includes ongoing sanction regimes and policy measures in other economies, which can affect commodity markets and financial conditions. Observers in the United States and other major economies monitor these budgetary developments for implications on global energy markets, inflation trajectories, and fiscal discipline within emerging market economies. The evolving budget picture is thus watched not only for domestic priorities but also for its potential ripple effects on cross-border trade, investment sentiment, and macroeconomic stability in the region. [Source: Kommersant]