Russia’s budget returns to deficit amid falling oil and gas revenues

After two months of surplus, Russia’s budget has slipped back into deficit as government spending exceeds revenues, with declining oil and gas income adding pressure on the economy.

In October, the Russian government spent 3.4 trillion roubles while collecting only 3 trillion roubles in revenue, pushing the budget deficit for the first nine months of the year from 3.8 trillion to 4.2 trillion roubles. The planned total deficit for 2025 is 5.7 trillion roubles, or 2.6% of GDP. Spending continues to rise: in January–October, outlays reached 29.6 trillion roubles, up 15.4% year-on-year.

Oil and gas revenues fell 21.4% to 7.5 trillion roubles over the ten months. Analysts note that declines are driven both by external factors, such as falling global oil prices and U.S. sanctions, and internal factors, including lower tax collections from the sector.

Meanwhile, non-oil-and-gas revenues remain positive but are slowing in growth. Crisis conditions in sectors like coal and steel are further straining revenues and profits, limiting the government’s ability to boost its income and putting additional pressure on the fiscal balance.