russia is once again facing serious economic difficulties
Amid declining oil and gas revenues in the first half of 2025, russia’s real VAT income fell by 2.1%, despite a nominal increase of 7.3%. As a result, the collected 6.999 trillion rubles ($89,7 billion) do not cover the inflation rate, which stands at 9.4%.
▫️ According to russia’s ministry of finance, the government plans to collect 15.456 trillion rubles ($197 billion) in VAT by the end of the year. However, only 45% of that target was achieved in the first half of the year. Additionally, the russian state budget is falling short in collecting other revenues, indicating deeper problems in the country’s economy.
▫️ This trend indirectly signals a decline in economic activity. According to rosstat, russia’s GDP growth has slowed significantly — down to 1.2% compared to 4.1% in 2024. Industrial growth has dropped by 2.5 times — to 1.8%, and retail trade turnover has declined fourfold.
▫️ The Center previously reported a 43% reduction in state support for small and medium-sized businesses in russia during the first quarter of 2025 — from 127.8 to 72.3 billion rubles. Additionally, the government has cut back on preferential loan programs, making access to financing even more difficult for businesses. kremlin remains focused on war, ignoring its economic consequences.
Despite systemic problems in the financial and economic sectors and worsening social conditions, kremlin continues to prioritize war over internal stability.
