Russia’s achieved an unwanted economic record in December as Moscow was forced to borrow £46billion in one month. This comes as the country continues to grapple with Western sanctions.
Russia’s oil revenues have dropped and Putin’s military continues to suffer logistical issues in Ukraine.
The Kremlin’s finance minister Anton Siluanov confirmed this deficit which equates to roughly 2.3 percent of Russian GDP (gross domestic product).
This also means that Russia’s spending is more than 30 percent higher than had been forecast at the start of 2022.
Russia had aimed to keep its spending surplus at no higher than one percent
In November, Russian oil revenues fell despite the country increasing its production. The International Energy Agency (IEA) reported that Russia earned just under £13billion from oil sales that month, the second lowest of 2022 behind £12.2billion in September.
Prior to the invasion of Ukraine in February, the European Union imported around 40 percent of its gas from Russia.
However, the bloc and other Western allies have looked to reduce their dependence on Russian gas while also hitting Putin with severe sanctions.
The IEA now predicts that Russia’s oil output will drop by 1.4m barrels per day in 2023.
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He compared Russia’s invasion of Ukraine to the country’s role in World War 1 and World War 2, as well as Moscow’s war against Napoleon’s French forces in 1812.
While Putin spoke with defiance, the Russian military has endured a number of setbacks throughout the conflict.
Putin’s men have lost territory near Kharkiv, in the Kherson region and also failed to take the Ukrainian capital Kyiv at the start of the invasion.
Soledar, in the eastern city of Donetsk, has become the latest of a number of key battlegrounds. Putin ally, Yevgeny Prigozhin, claimed that his private military mercenaries – the Wagner Group – has taken the town.
However, the Kremlin has been more tentative, with spokesperson Dmitry Peskov saying: “Wait, let’s not rush, let’s wait for official statements [by the Ministry of Defense].”
Ukraine has disputed the claim by Prigozhin, saying that the fighting is still ongoing and that Russia has suffered big losses.
