Russia's First Quarter Budget Deficit Reaches $29 Billion Amid Falling Oil Revenues and Rising War Costs.

Russia's federal budget balance recorded a deficit of $29bn in Q1 2023 due to heavy spending to support its military campaign in Ukraine and a 45% fall in energy revenues. The government has set a target of a 2% GDP deficit for 2023, but analysts predict it will be closer to 4-5%. The widening deficit may lead to an increase in corporate tax burden and inflationary risks, and the central bank may raise interest rates from the current 7.5%.