Russian economy is undergoing one of the most difficult times since the beginning of the invasion of Ukraine
The 2026-28 triennial budget brought bad news to the Russians with the VAT base rate rose 2%from 20%to 22%.
The little desired news comes after the promise that Vladimir Putin made in February 2024 not to substantially change the tax system by 2030.
In addition to VAT, Putin also sought the games of bad luck by applying a 5% rate on the game and 25% on betting houses. VAT for products considered essential, such as food or medicines, remains at 10%.
The Russian economy has been undergoing one of the most difficult times since the beginning of the invasion of Ukraine. According to The Guardian, GDP growth estimates to 2024-25 descended from 2.5%to 1%, and inflation is at 4%.
According to the same source, the state budget skidded: only between January and July this year, the budget deficit was 4.9 billion of rubles, just over 52 billion euros.
The difficult domestic situation is not helped by the external context. Crude prices have been lowering due to increased production driven by Saudi Arabia and the United Arab Emirates. According to Reuters, Russian gas and oil sales will fall 23%.
The current scenario contrasts with those of previous years, in which the state’s investment has shot due to war, which caused the Russian economy to accelerate more than 4% in 2023 and 2024.
