Worsening of Russia’s Economy: Inevitable Rise in Public Debt Due to Decline in Raw Material Revenues
Russia’s economy is currently facing a challenging period marked by a significant decline in revenue from the export of natural resources.
According to analysts, in August 2025, the country recorded its lowest foreign trade inflows from raw materials since 2022 — just 564 million euros, which is half the peak levels seen in previous years.
This indicates a substantial drop in income, threatening to weaken the financial stability of the nation.
The reduction in raw material flows is driven by global market trends and internal issues within the extraction sector.
In the oil and natural gas production sectors, profits have fallen by 30 percent, while losses have surged by over a thousand percent, impacting the overall state budget.
As a result, projections for 2025 suggest a potential budget deficit of up to 10 trillion rubles, posing serious challenges for the economy.
With approximately 4 trillion rubles available in the National Wealth Fund, the government has already committed to increasing public debt.
However, this approach carries risks: the cost of servicing the debt is about 14 percent annually, with yearly expenses reaching approximately 3.2 trillion rubles — nearly 8 percent of the total budget expenditures.
This creates an additional financial burden and necessitates an urgent revision of economic policies to prevent further deterioration.