The government of the aggressor country, the Russian Federation, conducted detailed calculations and concluded that the Russian federal budget will be in deficit for the next two decades, until approximately 2042.
Points of attention
- The ruble is anticipated to depreciate to 133 rubles per dollar by 2042, affecting the purchasing power of the currency.
- Understanding the implications of the budget shortfall is crucial for assessing the economic stability and future prospects of Russia.
Russian government admits serious budget problems
What is important to understand is that in the baseline forecast, the deficit in 2042 will increase from the expected 5.7 trillion rubles this year (2.6% of GDP) to 21.6 trillion (2.9% of the GDP forecast for 2042).
However, a conservative forecast predicts a figure of 54.7 trillion — that is, already 8.4% of GDP.
According to the Russian government's projects, expenditures will increase almost threefold in the baseline scenario — from 42.8 trillion in 2025 to 125.8 trillion (17% of GDP) in 2042. In the conservative scenario, they will increase to 144.5 trillion (22.2% of GDP).
In addition, it is projected that budget revenues will grow by an average of 2.1% annually, including oil and gas revenues by 3%.
The baseline scenario assumes that in 2042 revenues will amount to 104.1 trillion rubles (14.1% of GDP), while the conservative scenario assumes 89.9 trillion (13.8% of GDP).
It is also worth noting that oil and gas revenues will decline from the current 4% to 1.9% of GDP.
