Russia Faces Budget Strain as Oil Revenues Drop, Economic Uncertainty Grows
(MENAFN) Russia is facing potential budgetary strain due to shrinking oil revenues and global economic uncertainty, warns Finance Minister Anton Siluanov.
During a recent ministry discussion, Siluanov advocated for increasing fiscal reserves and revising the "outdated" budget rule that funnels oil revenues beyond $60 per barrel into the National Wealth Fund (NWF). This rule, intended to protect the economy from fluctuations in commodity prices, particularly oil, would need an update, Siluanov said, to ensure the NWF can sustain “three years of uninterrupted financing of expenditures.”
"The current global situation demands focused attention on the strength of public finances amid various global economic developments," he stated on Wednesday. The primary concern continues to be the “unfolding of trade wars,” which are limiting export opportunities for nations like Russia.
According to Siluanov, adjustments in spending are essential to reflect the “new realities.” He emphasized, “We’ll have to be more modest in our desires and ensure a greater return on every budget ruble.”
While oil and gas revenues now account for just 25% of the federal budget, a sharp drop from past years, the sector’s contribution still plays a vital role. Preliminary estimates show that oil and gas revenues for the first quarter of 2025 amounted to 2.64 trillion rubles ($28.4 billion), a 9.8% decrease compared to the same period in 2024.
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