Russia’s federal budget deficit grew a whopping 85% in July compared to the previous month. In the first half of the year, Russia ran an RUB823bn deficit. In July the deficit increased by RUB699.2bn, bringing the total budget shortfall from January-July to RUB1.5 trillion rubles ($20.5bn).
The cause of the deficit has less to do with dramatically increased spending by the Russian government and more to do with a decline in revenues.
Through the end of July, the federal budget spent 60.6% of its planned spending for 2020 (thus largely on target), but earned just 50.5% of its annual forecasted revenue. At the end of last month, tax revenues and customs duties stood at just 47.2% and 43.6% of 2020 projections respectively.
So is the Russian government running out of money? Not quite. As of August 1, Russia’s rainy-day National Welfare Fund held RUB12.96 trillion ($177bn). Due simply to the decline of the ruble, the fund has grown by RUB1.492 trillion ($20.4bn) in ruble terms, nearly enough to cover the budget shortfall.