Russia’s Revenue Surges in First Quarter Amid Rising Oil Prices
Russia has reported a significant increase in revenue in the first quarter of the year, driven by one-time tax payments and soaring oil prices despite ongoing sanctions related to its conflict in Ukraine.
According to a statement from the Finance Ministry, Russia experienced “sustained positive dynamics” in the flow of money to the federal budget, with revenues totaling 8.7 trillion rubles for the three months through March. This marked a 53.5% increase compared to the same period last year, with inflows from non-energy industries also rising by 43%.
The growth in revenue was attributed to various factors, including exit fees paid by foreign companies leaving Russia and a one-time tax payment from oil companies. Oil and gas revenue saw a rapid increase of nearly 80% compared to the previous year, fueled by rising oil prices and the tax payment.
The price of Brent crude oil has surged above $90 a barrel, up almost 20% since the beginning of the year due to geopolitical tensions and supply disruptions. However, despite the positive revenue growth, Russia has been grappling with a budget deficit since the end of 2022, largely due to the costs associated with President Vladimir Putin’s military intervention in UkraineÂ
Economists have noted that while energy income decreased in 2023, non-oil-and-gas sectors have shown strong growth, outperforming expectations. The country’s budget deficit at the end of the first quarter of 2024 stood at 607 billion rubles, a significant improvement from the previous year.
Overall, Russia’s economy appears to be resilient in the face of sanctions and geopolitical challenges, with revenue growth driven by a combination of one-time payments and rising oil prices.