Russia Raises 2025 Budget Deficit Amid Trade Slowdown

Russia has revised its 2025 budget deficit forecast to 1.7% of GDP, up from 0.5%, citing falling oil prices and diminished revenues, with a significant impact attributed to US President Donald Trump's tariffs and a broader global trade slowdown. The Finance Ministry now expects budget revenues of 38.5 trillion rubles and expenditures of 42.3 trillion rubles, with record military spending related to the Ukraine war. Oil and gas revenues for 2025 are projected to fall to 8.3 trillion rubles, or 3.7% of GDP, based on a lowered average oil price assumption of $56 per barrel. The deficit, mirroring 2024's gap, will be partially financed by the National Wealth Fund. Economists predict Russian GDP growth will slow to 1.6% in 2025, inflation will climb to 7%, and the ruble will weaken further. The government maintains that all planned budget commitments will be fulfilled despite mounting fiscal and economic pressures.