- Russia is proposing a VAT increase from 20% to 22% starting next year to help address a growing budget deficit of approximately $50 billion, primarily to finance defense and security amid ongoing military efforts in Ukraine.
- Despite experiencing strong economic growth over the past two years, the Russian economy is now slowing down, leading to concerns about sustaining government spending, which has increased significantly since the onset of the Ukraine conflict.
- Military spending has surged to nearly 9% of GDP, a level not seen since the Cold War, as the government seeks to maintain its financial commitments in light of expected similar budget deficits in the coming year.
Sources
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