Let's look at the numbers. Oil and gas budget revenues in the first six months of 2023 were down 47% year-on-year – a direct result of the EU's oil embargo and Gazprom's voluntary (and apparently irreversible) exit from the European market. As a result, the federal budget deficit after six months (RUB 2.6 trillion) is nearly equal to the whole planned annual deficit for 2023 (RUB 2.9 trillion).
At the St Petersburg Economic Forum in June 2023, top government officials were openly mulling serious tax hikes to keep the deficit under control. However, the Ministry of Finance has taken a different path: seriously cutting spending to minimize the deficit. Federal spending in June was down 33% versus the average monthly spending in January-May 2023.
. . . The problem is that government spending is the key factor keeping the economy afloat these days.
. . . Capital flight from Russia in 2022 hit a record $239 billion, according to the Central Bank, and is projected to be in the tens of billion dollars for 2023-25; meanwhile, no net capital inflow is projected in the forecast horizon.
. . . How much money does the government still have? Well, the deficit of the federal budget for the first six months of 2023 (RUB 2.6 trillion) comprised 38% of the remaining “liquid part” of the National Wealth Fund (RUB 6.8 trillion), according to the Ministry of Finance (MinFin).
The liquid part – cash on MinFin's accounts at the Central Bank – makes up about 54% of total National Wealth Fund money; the other part (RUB 5.9 trillion) is invested into various shares and bonds, mostly of state-affiliated companies ($3 billion was even invested in Ukrainian bonds while Viktor Yanukovych was president), and are not instantly liquid.