Reuters: Tax Hikes in Russia Are Now "Inevitable"

Tax hikes in Russia are inevitable. This is reported by Reuters, citing its source in the Russian government. "Otherwise, we simply will not be able to maintain the balance, even if we cut defense spending. Oil and gas revenues are declining, and the economy cannot fully compensate for this," said the agency's source.

Analysts predict that Russia's budget deficit, which exceeded the annual target by more than 1 trillion rubles in January-July, will be higher than planned. According to the government source's estimate, this year's deficit will amount to about 5 trillion rubles, or 2.5% of GDP.

Yevgeny Suvorov, an economist at CentroCredit Bank, said the deficit could grow to 8 trillion rubles, as to reach the 2025 spending target of 42.3 trillion rubles, Moscow's spending from August to December would need to be cut by almost 20% in real terms compared to the same period last year.