Russia's budget deficit rose to $34 billion for the first two months of the year, according to the country's Ministry of Finance data showed on March 6, up from $25 billion in January.
"That means that the shortfall has nearly hit the government’s full-year target of around $39 billion—or about 2% of Russia’s expected gross domestic product—in just the first two months of the year," the Wall Street Journal reports.
Russia's oil and gas revenues fell by 46% in January-February compared to the same period last year following the newly introduced price cap on the global sale of Russian crude and refined products imposed by the G7 nations. Meanwhile, the European Union banned most Russian oil imports.
Russia’s economy showed resilience in the face of Western sanctions last year, supported by ample revenues from oil and gas. Gross domestic product fell by 2.1% last year, according to official data, despite some initial forecasts after the invasion of a 10% to 15% decline.
"But the Western oil sanctions, introduced in December, as well as Russia’s halting of most of its natural-gas exports to Europe in the second half of last year, have now led to a stark turnaround for the state coffers," according to the Wall Street Journal.