Russia’s federal budget deficit will almost certainly exceed the 3% of GDP limit that President Vladimir Putin called for at the start of the year, after the gap for the first seven months of this year came in at RUB1,521 trillion or 3.3% of GDP, the finance ministry reported on August 15.

Both revenue generation and spending were running slightly behind the plan laid out in the budget law, but the gap between the two has narrowed considerably in recent months.

Budget revenues amounted to RUB6.967 trillion, or 50.7% of total revenues planned for the year; expenditure was RUB8.488 trillion, or 52.2% of the planned total spending. That led to a primary deficit of RUB1.187 trillion or 2.6% of GDP. The value of Russia's GDP in the first seven months was RUB45.423 trillion ($708.2bn).

The volume of oil and gas revenues received in the budget was behind the plan at RUB2.554 trillion, or 42.2% of the forecast for 2016; however, thanks to improved VAT collection and the ongoing reform of tax administration non-oil revenues are running head of plan at RUB4.413 trillion over the first seven months, or 57.4% of the annual forecast.

In July, the federal budget deficit was relatively small at RUB92.2bn on revenue of RUB1.098 trillion and expenses RUB1,190 trillion.

The state has already started winding down military spending, but is expected to splurge on social spending ahead of parliamentary elections this September. All in all the, the finance ministry is short of about RUB2 trillion from a budget that assumes a total of RUB15.8 trillion of spending this year.