By: Reuters – President Vladimir Putin said Russia would see higher oil and gas revenues by the end of the second quarter and that “positive trends” across the economy were gathering pace due to rising global oil prices.
Oil futures have climbed more than 5% since the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia surprised the market last week with further cuts to production targets from May.
Russia chalked up a $29-billion budget deficit in the first quarter of the year, largely due to falling revenues from its crucial energy exports, which have been targeted by Western sanctions.
Speaking at a televised government meeting, Putin lauded the resilience of Russia’s economy in the face of Western sanctions.
He said Russia’s oil and gas revenues, a key item in the state budget, had fallen by around 1.3 trillion roubles ($15.8 billion) in the first quarter of 2023.
“It is expected that by the end of the second quarter, against the backdrop of rising oil prices, the situation will change. Additional oil and gas revenues will begin to flow into the budget,” Putin said.
Earlier on Tuesday, the International Monetary Fund said Russia could see a sharply wider budget deficit and a smaller current account surplus this year, while global isolation and lower energy revenues dampen its growth prospects for years to come.
It is unclear if the positive trends the president was speaking of can continue.
The IMF raised its 2023 GDP forecast for Russia to growth of 0.7% from 0.3% but lowered its 2024 prognosis to 1.3% from 2.1%, saying it also expected labor shortages and the exodus of Western companies to harm the country’s economy.
($1 = 82.1455 roubles)