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near as bad as last year’s RUB3.3 trillion and the RUB1.7 trillion last January. However, by the end of February that had grown dramatically to a cumulative deficit of RUB1.5 trillion, or 0.8% of GDP.
While 0.8% is less than half of last year’s deficit, that is almost at the full year forecast for this year of a RUB1.6 trillion deficit in 2024, according to the budget forecast.
It raises the question: can MinFin really balance spending and revenues for all ten months left in the year? That will depend heavily on what happens to oil prices this year, how much the Kremlin spends on the war (a Russian spring offensive is expected), and whether the West can find more effective ways to sanction Russia’s income.
AS for the war in Ukraine: The Russian forces have the initiative since the fall of Avdiivka on February 17. Ukraine is running out of money, men and ammo. Since March 21 Russia has started an intensive bombardment of Ukraine’s power infrastructure to great effect. Unless the West comes up with more money and ammo for Ukraine, Kyiv is in an increasingly difficult situation that may bring the war to an end this year -- although that remains unlikely.
Putin has slammed allegations that Russia is planning to fight against Europe as “utter nonsense,” TASS reported on March 28 after French President Emmanuel Macron suggested that Nato should be prepared to put troops on-the-ground in Ukraine. However, Russia is expected to launch a new counteroffensive in May or June.
In retaliation to Russia’s new bombardment, Ukraine has stared striking Russia’s oil refining facilities: 24 attacks using long range drones have been launched in March of which 12 have been successful. This has reduced Russia’s oil products output by an estimated 14% as of the end of March and forced the Kremlin to start imports of gasoline from Belarus. While this will affect Russia’s export revenues, it is unlikely to be decisive unless Ukraine expands the campaign, which Ukrainian President Volodymyr Zelenskiy has threatened to do if more money and ammo from the West is not forthcoming.
8 RUSSIA Country Report April 2024 www.intellinews.com