Russia reveals lower-than-expected budget gap

Russia’s budget deficit has narrowed and will be significantly lower than previous government expectations as energy revenues and the broader economy have recovered despite pressure from Western sanctions, Russian Finance Minister Anton Siluanov revealed on Wednesday.

According to the latest estimates, the budget gap will total 1% of gross domestic product (GDP) this year, significantly lower than earlier projections, which would have seen the deficit reach 2.9 trillion rubles ($32.8 billion) or 2% of GDP.

Federal revenues have been on the rise as the proceeds from Russian oil and gas sales surged to their highest level in 18 months in October.

“Additional non-oil and -gas revenues are coming in quite well too. The economy is working, and growth rates allow us to talk about higher budget revenues,” Siluanov told reporters at the Federation Council.

In July, the Finance Ministry expected the budget gap to hover around 2% or 2.5% of the country’s economic output. However, the government later dismissed concerns over a widening deficit as positive “macroeconomic indicators” allowed authorities to revise budget projections upwards.

The budget deficit from January to October totaled 1.235 trillion rubles ($14 billion) or 0.7% of GDP.

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