Kremlin slashes spending by £24bn

As sanctions against Russia by the West bite, the Kremlin is set to reduce future spending plans by £24bn

According to Russian media, defense, technology, and transport budgets will all be cut.

As Moscow prepares for a two-year recession, more than 1.6 trillion rubles (or £24bn) have been removed from Russia’s state budget in the next three years.

In 2023, spending will be 557 billion roubles (£8.2bn), lower than in previously approved plans. Similar cuts have been made for the next two years.

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Although the budget adjustments are not significant in comparison to Moscow’s overall budget, they are indicative of the fiscal strain being caused by the conflict with Ukraine. The Russian state budget is about 21% less than it was in 2023.

The Kremlin’s finances are being buoyed by rising energy prices. However, its military spending has increased and its non-energy tax receipts have been affected by the decline in its economy.

These plans will balance the budget, but they will result in lower state spending on programmes that fund transport, science, technology development and defense, despite the conflict with Ukraine.

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