Russian Ministry of Finance: High oil revenues contribute to reducing Russia’s budget deficit
The Russian Ministry of Finance said that the budget deficit continued to shrink last October thanks to rising oil prices, the weakness of the Russian ruble and quarterly tax payments, while economic data showed that exports of petroleum products began to recover thanks to increased fuel exports.
The budget deficit – the first ten months of this year – reached 1.24 trillion rubles ($13.45 billion), or 0.7% of GDP, at the end of last October, compared to 1.7 trillion rubles, or 1% of GDP, a month ago.
Oil and gas revenues rose 27.5% last October compared to the same month last year, despite a 26.3% decline in the first ten months of the year compared to the same period last year.
Russian President Vladimir Putin boasts of the strength of his country’s economy in the face of Western sanctions, which included capping Russian oil prices.
However, the sharp increase in spending due to the war in Ukraine forced the government to reduce spending on other areas of the budget, such as health care and education.
Russian Defense spending will constitute nearly a third of total budget expenditures in 2024, according to draft financial plans published last September.
In the same context, economic data showed the beginning of a recovery in Russian petroleum product exports thanks to an increase in fuel exports, after a decline in these exports as a result of restrictions imposed on diesel exports and seasonal refinery maintenance operations.
The total exports of Russian petroleum products during the week ending November 4 reached about 2.5 million barrels per day, which is the largest daily exports since last September, when the government decided to impose a ban on the export of cars fuel.
Bloomberg News Agency reported that the global oil market is closely monitoring Russian fuel exports to estimate the volume of its oil production after it stopped publishing oil production data, adding that Russian oil exports are currently approaching their highest levels in recent months.
Bloomberg indicated that it is expected that exports of Russian petroleum products will continue to grow during the coming period with the increase in refinery production following the end of seasonal maintenance operations, and the delay of some shipments due to turbulent weather conditions during the past month could contribute to the current increase in exports.
While gasoline exports increased to 502 thousand barrels per day, diesel exports declined last week by 10% from the previous week to about 804 thousand barrels, which is their lowest level since early last month.
