Russia’s economy is slowly rotting
For several years already, every fall, Russia's finance ministry has performed the same ritual. It unveils a budget that looks sober, even responsible, with a shrinking deficit and falling inflation. Every year, it is ignored by reality. The budget for 2027, outlined at the end of last week, is no exception. The headline promise is a deficit of 2.2 percent of GDP next year, about 5.5 trillion roubles ($65 billion), down from roughly 3 percent expected this year. Revenues are to rise by 7.5 percent, which after inflation is barely 1 percent. Spending will grow by less than 6 percent, which after inflation is a cut of about 1 percent. For the first time since the invasion of Ukraine, the government even plans to start refilling the National Welfare Fund, the country's rainy-day savings.