Russia Can Manage Its Growing Budget Deficit, Putin Says
Putin said higher war spending and borrowing lifted the deficit to 2.8% of GDP, but he called the gap manageable.
- On Thursday at the Eastern Economic Forum in Vladivostok, President Vladimir Putin claimed Russia's budget deficit, which grew 40% to reach 2.8% of GDP in the first half of this year, remains manageable and poses no "critical" risk.
- The costs of the 4-1/2-year war in Ukraine have strained Russia's economy, forcing the government to raise taxes and increase borrowing, while Ukrainian drone attacks on facilities like Wildberries and Ozon have fueled inflation and created fuel shortages.
- Annual inflation stood at 6.3% as of Aug. 31, complicating the Central Bank's decision on the key rate, which currently stands at 14%. Businesses are pushing the Central Bank to lower rates below 12% to resume growth.
- Putin said on Thursday it was important not to overcool the economy, though he argued current monetary policy is not too tight. The Kremlin has developed loan programs to support businesses in the high-rate environment.
- The official deficit target is 1.6% of GDP, well below the current 2.8% level. The Central Bank board will convene on Sept. 11 to review the 14% key rate, with analysts expecting the bank to hold rates steady.
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Putin confirmed that the federal budget deficit increased by 40% in the first half of this year, and now stands at about 2.8% of the country's gross domestic product.
President Vladimir Putin said on Thursday that Russia's budget deficit, which increased by 40% in the first half of this year, reaching 2.8% of GDP, is not a "critical" risk to the economy and remains manageable, reports The Moscow Times.
Russia Can Manage Its Growing Deficit, Putin Says
President Vladimir Putin said Thursday that Russia's budget deficit, which grew by 40% in the first half of this year to reach 2.8% of GDP, poses no "critical" risk for the economy and remains manageable.
Key takeaways During the annual Eastern Economic Forum in Vladivostok, President Vladimir Putin declared that Russia's current budget deficit is under control. Despite a 40 percent increase in the first half of the year, bringing the deficit to 2.8 percent of GDP, the Russian leader stated that the minimal global debt burden […]
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