War Fuels Economic Crisis in Russia, FT Reports

Moscow is planning to cut its budget, writes the Financial Times. In Russia, oil and gas revenues have decreased by 20%, and the budget deficit has grown to 4.9 trillion rubles, instead of the planned 0.5% of GDP. The Ministry of Finance plans to cut non-military spending. This will mainly affect infrastructure and subsidies. Half of the reserve fund has already been spent on the war; the deficit will be covered by borrowed funds.

The strengthening of the ruble reduces budget revenues from energy exports. Even in the event of a ceasefire, military spending will remain high due to the need to restore equipment. According to the publication, the Kremlin is faced with a choice between military spending and social programs.