In January 2023 the Russian federal budget showed a deficit of 1.776 trillion rubles. This figure was roughly 14 times higher than the shortfall recorded in January of the previous year, and the Finance Ministry notes that it already accounts for more than half of the year’s planned deficit. This context highlights the sudden widening of the annual gap as the state began the new year with intensified spending and tighter revenue collection.
The ministry explains that the January deficit emerged from a near tripling of federal budget outlays compared with January 2022, totaling 3.1 trillion rubles. A sharp drop in internally collected value added tax, which fell by almost half, also played a key role in shrinking revenues. Preliminary data show January budget revenues at 1.356 trillion rubles, a decline of 35 percent year over year.
Oil and gas revenues reached 426 billion rubles but were down 46 percent versus January 2022, mainly due to lower Urals crude prices and reduced natural gas exports, according to the Finance Ministry. Non-oil and gas revenues stood at 931 billion rubles, down 28 percent from a year earlier.
On the expenditure side, total outlays rose by 59 percent from January 2022, reaching 3.117 trillion rubles. Notably, spending on public procurement climbed to 1.3 trillion rubles, more than five times the level seen a year earlier. The ministry linked the surge in expense financing in early 2023 to faster contract closures and advance payments tied to certain contractual obligations.
Internal VAT receipts dropped 44 percent compared with January 2022, to 379 billion rubles, due to an expedited repayment process that began in April. Consequently, quarterly compensation allocations were redistributed for the quarter’s first month. The Finance Ministry also attributed the drop in income tax receipts to the settlement of excess tax payments in prior periods.
Liquid portion of the National Wealth Fund
On February 6, Finance Minister Anton Siluanov stated that the liquid portion of Russia’s National Wealth Fund stood at about 6 trillion rubles. He emphasized that, despite potential risks from sanctions and lower hydrocarbon prices, the government remains committed to meeting all planned obligations to citizens and to the country’s broader fiscal duties.
Earlier ministry releases showed the total NWF as of January 1 at 10.43 trillion rubles, which is roughly 7.8 percent of the prior year’s GDP. The NWF functions as a specialized segment of the federal budget designed to cover budget shortfalls and pension fund needs, while also supporting Russian voluntary retirement savings. It is funded by excess oil and gas revenues, taxes on oil and gas production, and oil export duties.