On Wednesday, Russia’s Finance Minister Anton Siluanov announced that the Russian government’s budget deficit has shrunk unexpectedly, and will be significantly smaller than had been anticipated due to increased energy revenues and economic growth which recovered in spite of Western sanctions imposed on Moscow.

Latest estimates indicate the budget deficit will only add up to 1% of the nation’s gross domestic product (GDP) in 2023. That is far below earlier estimates that predicted it would amount to 2.9 trillion rubles, ($32.8 billion) which would be equivalent to 2% of the nation’s GDP.

As energy revenues from the sale of Russian oil and gas have surged, generating the highest level of profits seen in 18 months during the month of October, government tax receipts have also been increasing.

Speaking at the Federation Council of the Federal Assembly, Siluanov told reporters, “Additional non-oil and -gas revenues are coming in quite well too. The economy is working, and growth rates allow us to talk about higher budget revenues.”

As of July, the Finance Ministry had been forecasting the budget deficit would come in at around 2% to 2.5% of the nation’s economic output. However concerns over the fact the budget deficit appeared to be enlarging were dismissed by the government, which noted that there were “macroeconomic indicators” which pointed to the fact the budget projections would be revised to show a diminishing budget gap.

From January to October, the budget deficit added up to 1.235 trillion rubles ($14 billion), which amounted to 0.7% of the nation’s GDP.