War boosts Russian budget revenues despite economic sanctions
9 March 2024 16:11
The Russian Finance Ministry displayed the state budget performance results for the first two months of 2024. The Putin regime is demonstrating growing creativity in accounting, generating increasingly unbelievable data.
The Kremlin's budget revenues surged by 59 percent and reached 5 million rubles. This coincides with a simultaneous increase in expenditures, principally for war purposes, by only 17 percent over the year. The budget deficit amounted to 1.47 trillion rubles, which represents 0.8 percent of GDP - reports the Russian newspaper Kommersant, citing the ministry's statement.
It's hard to believe this information, considering the impacts of the war. Russia was hit by sanctions imposed by the European Union, the USA, and the G7. Additionally, there were losses in the European gas and oil market and issues with international trade payments.
Revenues from oil and gas for the same period jumped by 71.2 percent, to 1.6 million rubles. Revenues from other sources, mainly food and agricultural products, rose to 3.4 million rubles, marking an increase of 53.5 percent. The data does not reflect the effects of Gazprom's loss of the gas market or the decrease in orders for Russian oil from India.
On the expenditure side, the reports from the Russian finance ministry seem miraculous. Expenditures have only increased by 17.2 percent, which, considering the massive costs of war, appears improbable. Russia's budget deficit in 2023 is expected to hit 3.2 trillion rubles or 1.9 percent of GDP.
"War becomes the driving force of the Russian economy"
Russia possesses the financial, human, material, and technical resources to continue its conflict in Ukraine for at least two more years - assesses Lithuanian intelligence in a special report.
Russia has spent significantly more money than planned. In the first half of 2023, expenditures for this purpose exceeded the amount officially projected for the entire year, and by this year, at least one-third of the military budget planned for the entirety of 2024 has already been spent - over 10 trillion rubles, or about £110 billion (approximation).
The war and the war industry become the driving forces of the Russian economy, drawing upon the country's financial, material, and human resources at the expense of other economic sectors - emphasizes Lithuanian intelligence.
