Russia Is Running Out of Money: The Budget Deficit Is Already Breaking Records
17 July 08:31
Russia’s federal budget in 2026 may face a significantly larger deficit than the government had projected. According to updated estimates, the gap between revenue and spending will exceed the official plan by more than 1 trillion rubles, a situation attributed to record government spending and a growing burden on the economy. This was reported by "Komersant Ukrainian", citing Reuters and data from the Russian Ministry of Finance.
Russia’s budget deficit may exceed the official forecast
According to Reuters, which cites Russia’s government budget portal, the Russian Federation’s federal budget for 2026 may end with a deficit of 4.83 trillion rubles, although the current budget law calls for a deficit of only 3.79 trillion rubles. This means the deficit will exceed the forecast by more than 1 trillion rubles.
According to updated estimates:
- budget revenues will remain at 40.28 trillion rubles;
- expenditures will increase to 45.11 trillion rubles;
- the deficit will amount to approximately 1.9–2% of GDP, which is higher than the initial budget estimates.
The Russian Ministry of Finance reported that in the first half of 2026, the federal budget deficit had already reached 5.73 trillion rubles, or 2.5% of gross domestic product.
This is nearly 1.7 times more than during the same period in 2025. The main reason cited is the accelerated growth of government spending, primarily on defense, security, and funding the war against Ukraine.
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The Central Bank of the Russian Federation sees risks to inflation
The budget deficit is growing just as the Bank of Russia is deciding whether to continue its cycle of key rate cuts.
The Russian regulator has repeatedly emphasized that the widening budget deficit is one of the main drivers of inflationary pressure, as high government spending stimulates demand and puts upward pressure on prices.
Siluanov acknowledged the budget deficit would exceed the target
Russian Finance Minister Anton Siluanov confirmed that the actual budget deficit will exceed the official target.
At the same time, he stated that the government does not plan to sharply increase domestic borrowing to cover the shortfall.
In addition, the Russian Ministry of Finance has postponed the achievement of a zero primary budget deficit from the previously planned date to 2029, indicating long-term problems with public finances.
Economists attribute the deterioration of the budget situation to several factors:
- record-high military spending;
- a slowdown in energy export revenues;
- high costs of supporting the defense industry;
- the need to fund social programs amid the war.
Against this backdrop, the Russian government is forced to adjust its medium-term budget policy and postpone compliance with its own fiscal rules.
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