Oil losses have collapsed the Russian budget: Putin has cut spending on strategic industries

Kremlin dictator Vladimir Putin has signed amendments to the 2025 budget that will significantly cut spending on a number of economic programs, due to a sharp decline in revenues from the oil and gas industry, the main source of funding for the Russian budget.

This is reported by The Moscow Times.

According to the approved amendments, budget revenues from oil and gas are expected to be 8.3 trillion rubles, 24% less than the initial forecasts. At the same time, the budget deficit will triple to 3.8 trillion rubles instead of the planned 1.2 trillion.

In this regard, the Russian authorities are reducing funding for five key state programs:

– the industrial development program will lose more than 97 billion rubles

– funding for scientific and technological development will be reduced by 22 billion

– aircraft industry development program — minus 10 billion (20% of the budget)

– shipbuilding — minus 4.1 billion

– energy — minus 7.2 billion

Economic problems worsened in the spring, when the price of Urals oil fell to $50 per barrel (versus the expected $70) and the ruble unexpectedly strengthened to less than 80 rubles per dollar. As a result, oil and gas revenues fell by 14% in the first five months of the year, and by 34% in May.

As a reminder, the head of the Bank of Russia, Elvira Nabiullina, stated that Russia has exhausted the resources that allowed the economy to demonstrate growth for two consecutive years in conditions of war and sanctions.

As reported by the Center for Countering Disinformation, Russia has significantly reduced funding for science, industry, and innovation due to falling oil revenues and a budget deficit.

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