Bloomberg reports Russia neared cash depletion in April as war costs mounted
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Russia's war spending pushed the federal treasury to the brink of running out of cash in April, Bloomberg reported, citing people familiar with the matter. Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that the government would not have enough money to make all scheduled payments on time. The treasury's single account fell to roughly minus 5.5 trillion rubles, or about $65.3 billion in the red, forcing austerity measures.
Key Facts
- The balance on Russia's federal treasury single account fell to roughly minus 5.5 trillion rubles, or about $65.3 billion in the red, in April, Bloomberg reported.
- Russia's federal deficit for January through April reached 5.8-5.9 trillion rubles, or 2.5% of GDP, nearly double the same period a year earlier, according to Finance Ministry data reported by Forbes Russia.
- The Russian government cut non-military spending by 35% and is expected to trim federal staffing by 15% as part of an austerity regime, Bloomberg wrote.
- Debt-servicing costs now consume roughly 4 trillion rubles ($47 billion), about 9% of the federal budget, according to the Russian government's budget.
- Finance Ministry and central bank officials warned President Vladimir Putin in June that war spending was on an unaffordable trajectory, Bloomberg separately reported.
Cash Crunch Warning
Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin in April that the government would not have enough money to make all scheduled payments on time, Bloomberg reported, citing people familiar with the matter. The balance on the federal treasury's single account fell to roughly minus 5.5 trillion rubles, or about $65.3 billion in the red, forcing the government into an austerity regime. The austerity measures have since cut non-military spending by 35% and are expected to trim federal staffing by 15%, Bloomberg wrote. Siluanov told a Rossiya-1 journalist four days before Bloomberg's story ran that the budget "has no problems whatsoever" and is "fully backed by resources."
Deficit and Debt Burden
Russia's federal deficit for January through April reached 5.8-5.9 trillion rubles, or 2.5% of GDP, nearly double the same period a year earlier, according to Finance Ministry data reported by Forbes Russia. Overruns on military and security budget lines potentially reached 2 to 4 trillion rubles ($23 to 47 billion) this year, the Financial Times separately reported. Debt-servicing costs alone now consume roughly 4 trillion rubles ($47 billion), about 9% of the federal budget, according to the Russian government's budget. Putin has refused to cut military outlays, instead directing cuts elsewhere, Bloomberg reported.
Kremlin Response and War Stance
No state-run Russian outlet or Kremlin spokesperson has publicly addressed the Bloomberg report. Kremlin spokesman Dmitry Peskov has previously acknowledged the deficit while describing it as manageable "current difficulties." A secretive visit to Moscow by CIA director John Ratcliffe this week fuelled further speculation, with the New York Times reporting that at least part of the message he delivered was to provide an unfiltered view of the bleak situation the country is facing on the battlefield and at home. Russian leaders routinely rebuff the concept of a negotiated peace on anything less than Russia's maximalist terms.
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Bloomberg reports Russia neared cash depletion in April as war costs mounted
