Russia’s budget surplus has fallen significantly, the latest indication that Russia’s public finances are under pressure from sanctions and the Kremlin cutting off gas supplies to Europe.
In the first eight months of 2022, the budget surplus fell to 137bn rubles (£1.9bn), a sharp drop from 482bn in year-to-date data the previous month.
Russia’s public finances were bolstered after the soaring energy prices and increased revenues.
Economists warn that Russia’s surplus could turn into a deficit in September due to falling energy sales to Europe. As gas prices continue to fall, revenue from energy could be further squeezed.
As the EU prepared proposals to prevent a winter energy crisis and measures from reducing power demand, benchmark gas prices fell 9pc to reach their lowest level in a single month.
Gas prices fell to EUR192 per megawatt-hour, more than 40% below August’s highs.
A complete cutoff of gas supplies to Europe (Russia’s largest export market) could result in tax revenue losses of up to 400 billion rubles ($6.6 Billion per year). Even in the medium term, it won’t be possible for lost sales to be fully compensated with new markets.
