Russia’s total budget revenue decreased by 26% in July 2022 compared to July 2021, reflecting a failure in revenues from all major taxes.
In Russia, they can shout all they want that the Western sanctions imposed for a large-scale invasion of Ukraine are not working, but the statistics say otherwise. The war in Ukraine has set the Russian economy back four years in just one quarter, writes Bloomberg. And this is the path of one of the longest recessions in history. This is just the beginning.
Disappointing prediction
If at the beginning of 2022 the Russian economy was gaining momentum, then in the second quarter it began to decline. Russia’s GDP contracted for the first time in more than a year, falling 4.7% year-on-year, according to the median forecast of 12 analysts surveyed by Bloomberg.
“We expect contraction to slow down in the fourth quarter due to looser monetary policy supporting demand. However, in 2023 the economy will lose another 2% because the European energy ban will reduce exports,” said experts polled by Bloomberg.
Russian sanctions have disrupted trade and paralyzed industries such as autos, while consumer spending has stalled.
Although the economic downturn so far appears to be less sharp than initially predicted by experts, the downturn will worsen in the coming quarters, the agency wrote. Experts suggest that the Russian economy will reach its lowest point in mid-2023 at best.
The Bank of Russia forecasts that GDP will fall by 7% this quarter and possibly more in the last three months of the year. According to Russian central bank estimates, the economy shrank by 4.3% in the second quarter.
Failure of receipts
Russia’s total budget revenue decreased by 26% in July 2022 compared to July 2021, reflecting a failure in revenues from all major taxes.
Raw material rental fees fell by 22% in annual terms, to 771 billion rubles. “The turning of the” gas valve “in the direction of European countries had an effect, due to which Gazprom’s exports fell to the levels of the early 1980s. At the end of the month, the budget collected only 57.3 billion rubles. export duties on gas – the lowest amount since the pandemic crisis. For comparison: in June it was 217.4 billion rubles, in May – 199 billion rubles, in April – 234 billion rubles .
In addition, fees from the non-core sector of the economy have declined significantly. VAT receipts (the second largest source of revenue) decreased by 40%. The budget collected 493 billion rubles. internal VAT and 193 billion from imported goods. Excise taxes decreased by 26% to 62 billion rubles; income tax – by 32%, up to 129 billion rubles.
“Attempts to establish parallel imports did not bring the budget rubles from customs: revenues from import duties fell by 60%, and excises – by 44% ( up to 32 and 7 billion rubles, respectively),” the publication stated.
At the same time, according to The Moscow Times, the Russian government increased spending by 17%. As a result, at the end of the month, a deficit of 892 billion rubles was formed in the budget, that is, every third ruble spent was left without collateral.
Putin’s entourage already understands everything?
Top Kremlin officials and members of Putin’s elite are “panicked” and are secretly trying to end the bloody war in Ukraine, The Daily Mirror wrote, citing experts.
According to the newspaper, on the night of August 13, a high official of the Kremlin secretly turned to the West for this purpose. The unnamed member of Putin’s elite said the Kremlin was in panic and desperate for an end to the war.
An account of this appeal by a Kremlin official was circulated to Western intelligence agencies. According to him, senior officials and officials close to Putin are worried about the economic collapse caused by the war and tough Western sanctions. Some Kremlin officials are also concerned about the risks associated with fighting the Zaporozhye nuclear power plant at Energodar. It is likely that the official in question turned to CIA contacts or Western diplomats behind Putin’s back.
According to The Daily Mirror, the “situation report” they came across is being taken seriously by intelligence agencies. “A representative of Putin’s inner circle sent a signal to the West about the desire to negotiate. The mood of the Kremlin elite is panic,” said the document, in particular.
It is also said that an unnamed Kremlin insider is “one of the pillars of the regime” and that he and his family are in grave danger. It was also noted that Putin had already carried out several purges, firing military leaders and high-ranking spies, and that some had disappeared or mysteriously fallen ill.
The night before the publication, a senior Ukrainian diplomatic source told the Daily Mirror that proposals from Putin’s inner circle, if made, would not be a surprise.
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.