Thread by @anno1540

Russia faced a historic budget deficit: where did the money go and when Putin will have no money for the war

Russia faced a record budget deficit at the end of January. Oil and gas revenues fell and military spending soared. /1

The total deficit may amount to about $97 billion by the end of 2023.

State finances are collapsing, and the aggressor's economy is plummeting. The effect of sanctions, which many economists expected last year to be rapid, is only now coming. /2

Read about how much Russia will lose and whether there will be enough money for the war in the OBOZREVATEL article.👇
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State finances are collapsing, and the aggressor's economy is rapidly declining. The effect of sanctions, which many economists expected last year to be rapid, is only now coming.
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Russia spends more than it earns, so reserves are really shrinking. If everything continues at the same pace, there will be enough money for the war for another 2.5 years , CitiBank calculated
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According to their estimates, reserves will be exhausted this year only if oil prices collapse to $25 per barrel (currently $54.9).
And although the officials of the Putin regime continue to talk about how the strict Russian economy copes with all the challenges,
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the numbers show the real situation.
In January 2023, the budget deficit of the Russian Federation reached a record level of $25 billion. There are two reasons:

oil and gas revenues fell by 45% (to $6 billion);
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expenses soared by 35% compared to January 2022 (reached 3.17 trillion rubles, or $44.7 billion).
Reserves (National Welfare Fund) of Russia turned out to be partially paralyzed. Before the start of a full-scale war, Russia had accumulated more than $600 billion.
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Half of this sum was frozen due to the imposed sanctions. The rest of the amount – in gold and other currencies – remained intact. But because of the sanctions, it has become difficult to sell gold
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The Russian Federation keeps about $45 billion in yuan. The Russian government believes that liquid (those that can be spent quickly) reserves amount to $91 billion.
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At the end of the year, according to various estimates, the budget deficit of the Russian Federation amounts to about $97 billion. This deficit will be covered from the same reserve fund, which is partially frozen
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I had to sell gold in January. Spent 3.6 tons. That is, if during the whole year the volume of the budget deficit would be at the same level as in January 2023, the Russian Federation would have spent its reserves already this year.
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But this does not mean that the money for the war would run out. Putin's regime can sacrifice capital expenditures, funding for infrastructure construction, and budgets for education and medicine.
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Therefore, a situation where the Russian Federation would not be able to finance its army, even as a result of cutting other expenses, will be considered a guarantee that the money for the war has run out.
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Why did Russia start losing so much money? Are these all sanctions
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Russia is waging a full-scale war against Ukraine, with mobilization and the seizure of territories. It requires huge resources. According to expert estimates, every day of the war costs the Russian Federation approximately half a billion dollars.
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At the same time, sanctions deprived her of the lion's share of income. You can read more about the impact of the energy embargo here
news.obozrevatel.com/ukr/economics/…
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Even before the start of a full-scale war, the leaders of Western countries warned Putin that there would be large-scale economic restrictions after a major aggression.
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Probably, the Russian Federation did not believe in this. Otherwise, they would not keep at least half of their gold and foreign exchange reserves in the EU.
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Russia also did not believe that Europe was capable of giving up their energy resources. But the war made its adjustments. Europeans have to pay more for utilities, and Russian propaganda emphasizes this. But it is not accepted to talk about the fact that their own economy /20

is falling into the abyss, the sales markets for which the Russian Federation fought for decades have already been lost In order to destroy Ukrainian cities and temporarily seize them, Putin is sacrificing his own country
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Not long ago, it seemed that wars of aggression were a thing of the past forever. For example, globalization, unbreakable agreements, economic interests prevail, and harm from such actions will be more than possible benefits
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Russia, under the leadership of the Putin regime, as if from a textbook on the history of the Second World War and following the example of Adolf Hitler, decided to "protect" its nation by seizing foreign countries
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And it seems that the absolute majority of states understand that if the aggressor is not stopped now, the number of victims will be in the millions, and a world war cannot be avoided.
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Russia has already found a military ally. It became Iran. It is the only country that shares military development with Putin. But the problem is that over the decades under sanctions, Iran itself has turned into one of the most backward countries in the world
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And while the Iranian authorities hope for revenge on the Western world and help from the Russian Federation, Russia itself faces the fate of a world outcast with a backward economy and exorbitant military expenditures.
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Until recently, oil and gas revenues allowed Putin not only to create his army, but also to buy a yacht for almost a billion dollars, to build one of the largest palaces in the world with a personal strip room and an aquadisco
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The yacht was arrested, oil and gas revenues were cut. And now, with every month of the war against Ukraine, Russia is getting closer to the moment when it will no longer be able to maintain its army
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And whether it will be an army of pensioners, or an army of policemen and Russian guards inside the country, or occupation troops - it does not matter. The collapse of the system will finally come along with its impoverishment.
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Source:
news.obozrevatel.com/ukr/economics/….
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