Russia faces economic strain amid budget deficit

The Russian economy is facing increasing pressures from the effects of the war and military expenditures, with the budget deficit worsening amid slowing growth and declining consumer confidence, despite rising oil revenues due to the war in Iran. Additionally, rising prices and decreased confidence have led to a slowdown in economic growth, which the government estimates at 0.6% this year, with confidence levels falling to their lowest since 2024. Although some government sectors remain stable and oil revenues have increased, economists warn of the erosion of the Russian economy's structural foundations and the potential emergence of a long-term crisis, especially as Western sanctions continue and foreign investments remain weak. This diminishes competitiveness and threatens the country’s economic future.

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