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uhnope

(6,419 posts) Thu Mar 12, 2015, 07:57 PM Mar 2015

Russia’s Budget Deficit More Than Doubles in a Month

Source: WSJ

MOSCOW—Russia’s budget deficit more than doubled in February, the finance ministry said, amid a drop in oil prices and Western sanctions that are sending its economy toward recession.

The country’s budget deficit rose to 10.5% of gross domestic product in February from 4.2% in January, as revenues contracted even as expenditures were slightly reduced.

Russia’s revenues were hit by lower prices of oil, one of the country’s key exports, along with shrinking revenues from collection of taxes, such as value added tax, according to Vladimir Kolychev, chief economist at VTB Capital.

A faster-than-expected spending of military expenses exacerbated the problem, Mr. Kolychev said. This could be a temporary development and the budget deficit is likely to shrink in the second half of the year, he added.

Read more: http://www.wsj.com/articles/russias-budget-deficit-more-than-doubles-in-a-month-1426176589

Helluva job...

12 replies

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Highlight:

Russia’s Budget Deficit More Than Doubles in a Month (Original Post) uhnope Mar 2015 OP

start wars and run up deficits. WDIM Mar 2015 #1

But... so many here assured us that Russia would barely feel a small pinch from sanctions rpannier Mar 2015 #2

The drop in the oil price has been the main driver. former9thward Mar 2015 #3

It's true the drop in oil prices is the biggest problem rpannier Mar 2015 #4

Russia has reserves that it will use to pay the deficit newthinking Mar 2015 #7

Message auto-removed Name removed Mar 2015 #6

deficit spending is the correct approach during an economic slowdown geek tragedy Mar 2015 #5

In 2015 - By reserve funds newthinking Mar 2015 #8

They will spend their way out of it? Major Hogwash Mar 2015 #9

Russia's pensioners will start to feel it soon. joshcryer Mar 2015 #10

Not good nt Spider_Mann Mar 2015 #11

Every nation on the planet needs to get away from fossil fuels. More austerity coming their way. freshwest Mar 2015 #12

WDIM

(1,662 posts)

1. start wars and run up deficits.

Reply to uhnope (Original post)

Thu Mar 12, 2015, 08:00 PM

Mar 2015

Sounds like the US economic plan.

rpannier

(24,330 posts)

2. But... so many here assured us that Russia would barely feel a small pinch from sanctions

Reply to uhnope (Original post)

Thu Mar 12, 2015, 08:01 PM

Mar 2015

This is clearly some partisan, anti-Russian thingy
And who is Mr. Kolychev anyway? Just cuz he's a Chief Economist and his information comes from the Russian Finance Ministry...
What does that prove

Heckuvajob Vladi

former9thward

(32,028 posts)

3. The drop in the oil price has been the main driver.

Reply to rpannier (Reply #2)

Thu Mar 12, 2015, 08:28 PM

Mar 2015

You notice there is not a single quote in the article. The WSJ is summarizing and adding their own spin. Did they say "Western sanctions" or did the reporter?

rpannier

(24,330 posts)

4. It's true the drop in oil prices is the biggest problem

Reply to former9thward (Reply #3)

Thu Mar 12, 2015, 08:30 PM

Mar 2015

But, I fault the Russian government for not having prepared for eventualities like this (Kind of like Dumbya in Iraq)
Russia also has a low tax rate 10%, which (imo) exasperates the situation

newthinking

(3,982 posts)

7. Russia has reserves that it will use to pay the deficit

Reply to rpannier (Reply #4)

Fri Mar 13, 2015, 01:23 AM

Mar 2015

Here is a more honest analysis. (most here have noticed unhope's posts are generally propagandized or selected for a slant)

Russia to tap $50 billion from Reserve Fund as deficit balloons

Reuters) - Russia plans to spend more than $50 billion from its emergency Reserve Fund in 2015 as falling oil prices and a slumping economy cause the government's deficit to rise.

First Deputy Finance Minister Tatiana Nesterenko said on Friday the government would ask parliament to allow the spending of up to 3.2 trillion rubles ($52.36 billion) from the Reserve Fund in 2015, including 500 billion rubles already envisaged in the budget.

The increase means that Russia could spend well over half of the fund, currently worth $85 billion, in a single year - a rapid run-down of the fiscal buffers that underlines the precarious state of government finances.

Russia is presently revising its budget for this year, which was based on the assumption the oil price would be $100 per barrel - well above its current level of around $60 per barrel. Ministers have previously said the budget will now assume an average oil price of $50 per barrel.

http://www.reuters.com/article/2015/02/27/us-russia-crisis-reserve-fund-idUSKBN0LV15R20150227

Response to former9thward (Reply #3)

Name removed Message auto-removed

geek tragedy

(68,868 posts)

5. deficit spending is the correct approach during an economic slowdown

Reply to uhnope (Original post)

Thu Mar 12, 2015, 08:42 PM

Mar 2015

the takeaway from this is that there is a very real economic slowdown, requiring this kind of fiscal stimulus.

How is the deficit being financed--via reserve funds or by borrowing?

newthinking

(3,982 posts)

8. In 2015 - By reserve funds

Reply to geek tragedy (Reply #5)

Fri Mar 13, 2015, 01:24 AM

Mar 2015

see above

Major Hogwash

(17,656 posts)

9. They will spend their way out of it?

Reply to geek tragedy (Reply #5)

Fri Mar 13, 2015, 02:51 AM

Mar 2015

You must be kidding.

joshcryer

(62,276 posts)

10. Russia's pensioners will start to feel it soon.

Reply to uhnope (Original post)

Fri Mar 13, 2015, 04:00 AM

Mar 2015

Spider_Mann

(40 posts)

11. Not good nt

Reply to uhnope (Original post)

Fri Mar 13, 2015, 04:05 AM

Mar 2015

freshwest

(53,661 posts)

12. Every nation on the planet needs to get away from fossil fuels. More austerity coming their way.

Reply to uhnope (Original post)

Fri Mar 13, 2015, 01:04 PM

Mar 2015

'More,' because Russians took a beating when the USSR collapsed. Instead they want to restore the ancient Russian empire. That's a long stretch, but the Russian Orthodox Church is in favor of it. As more civil institutions fail, they'll move into power.

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