Russia: falling oil and gas revenues and pressure on the budget

Towards the middle of the year, Russian economic statistics showed a sharp drop in revenues from the sale of hydrocarbons. The decline in world prices for Urals and difficult logistics conditions under the pressure of sanctions have led to a noticeable decline in oil and gas revenues to the budget. This caused an immediate reaction from the markets and pressure on exchange rate stability. For the federal budget, falling export revenues mean less flexibility in the areas of social spending and infrastructure. Economists point out that with a sustained decline in oil and gas revenues, the government will be forced to either increase domestic taxes or cut budget programs. For regions, this often means delays in salaries and subsidies. At the same time, businesses signaled problems with access to external financing and the rising cost of importing technology, which reduced investment plans. The measures proposed by the Central Bank and the Ministry of Finance - partial currency restrictions and stimulation of domestic production - do not have an immediate effect.