Russia's economy is falling into the abyss: war spending has increased by 282%, the budget hole is growing

Russia's budget suffers due to war costs
Russia's budget suffers due to war costs

Over the year, Russia increased its military spending by 282% to $26 billion in January-February 2023. This hits the budget of the aggressor country. In just two months, Russia spent more than 40% of all planned annual expenditures on the military sector. This increases the record hole in the Kremlin's budget.

This was reported by Reuters. Analysts analysed the Russian budget data for the beginning of the year, which were published only in May.

Thus, the Russian Ministry of Finance stopped publishing data on the implementation of individual monthly budgets in May 2022, but has now added data for 2022 and early 2023. According to the data, defence spending in January was RUB 1.18 trillion, and in February it was RUB 822.4 billion.

"Russia's budget deficit from January to April was 3.4 trillion rubles, compared to a surplus of 1.2 trillion rubles in 2022. Moscow spent more money (than planned - Ed.), and energy revenues fell," the article says.

Earlier, the American edition of The Wall Street Journal stated that Russia's economy was beginning to fall apart. The newspaper noted that the days when Russia was making huge profits from oil and gas sales amid rising prices after the full-scale invasion of Ukraine are over. And so:

  • Western sanctions are getting tougher;
  • Russia's government revenues are declining;
  • Russia's economic growth has slowed for a long time;
  • gas and oil, the country's largest exports, have lost their main customers;
  • the ruble has fallen by more than 20% (against the dollar) since November;
  • the labour force has shrunk as young people go to the frontline or flee the country for fear of being drafted;
  • uncertainty is holding back business investment.

It is emphasised that the loss of European markets not only negatively affects the Russian economy. It also actually turns the country into a colony of China.

As OBOZREVATEL reported, against this background, the Russian authorities are looking for new sources of funding for the war. For example, the State Duma recently proposed to impose a "fun tax" on Russians.

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