Russia’s Budget Deficit Reaches $34.4 Billion in 2024, Continuing Record Deficits for Third Year

Russia’s budget deficit increased to $34.4 billion (3.49 trillion rubles) in 2024, marking the third year in a row with a deficit of over 3 trillion rubles, according to Russia's Ministry of Finance on January 21.

Revenues rose by 26% in 2024, reaching $361.6 billion (36.71 trillion rubles), while spending increased by 24.2% to $396.0 billion (40.19 trillion rubles). The deficit made up 1.7% of GDP, slightly lower than the 1.9% recorded in 2023, but well above the Ministry’s original target of 0.9% (or $15.8 billion). Without oil and gas revenues, the deficit grew to 7.3% of GDP, up from 7% the previous year.

In December, government spending rose to $70.4 billion (7.15 trillion rubles), exceeding the year-end levels of 2022 and 2023. The Finance Ministry stated that this included advance spending for 2025, providing potential flexibility for managing budgetary obligations in the coming year.

The increase in liabilities may be influenced by monetary policy changes, as the Bank of Russia kept its key interest rate at 21% in December. This decision followed Russia’s leader Vladimir Putin’s call for a "balanced" approach.

In 2025, federal spending is allegedly projected to rise to $408.6 billion (41.47 trillion rubles), with 41% allocated to defense, law enforcement, and security services. Higher tax revenues are expected to reduce the fiscal deficit to 0.5% of GDP.

Over the course of 2024, the Finance Ministry revised its spending plans twice to accommodate increased financial demands. At the current exchange rate, $1 equals 101.4955 rubles.

On December 18, in a report by The Economist, it was stated that Ukraine is outpacing Russia in several key areas for the first time since the full-scale invasion began in 2022. The National Bank of Ukraine projects GDP growth of 4% in 2024 and 4.3% in 2025.