The Russian budget deficit in the first half of the year reached 97% of the annual plan due to a drop in oil and gas revenues.

According to the KSE, in May-June, Russian oil and gas revenues were 35% lower than in the same period in 2024, causing increased budgetary pressure. In the first half of the year, the federal budget deficit reached ₽3.7T, or 97% of the annual plan, which is more than 400% higher than in the first half of 2024.

At the same time, the Russian economy has also slowed down. In the first quarter, real GDP fell by 0.6% quarter-on-quarter, signaling an approaching recession. Constraints in the labor force and investment will continue to restrict growth in 2025, increasing fiscal risks.

Additionally, Rosstat reported that in the first half of the year, 141,000 companies closed in Russia, while only 95,000 new businesses opened. Thus, the “death rate” of businesses in Russia exceeded the “birth rate” for the first time since 2022. Companies in the trade, construction, and manufacturing industries were the most likely to close.

According to forecasts by the Central Bank of Russia, this year the economy will grow by a maximum of 1-2%, slowing gradually by year’s end, and in 2026, by 0.5-1.5%.