Russia’s Budget Deficit Exceeds Target by More Than One Trillion Rubles

Experts believe the increase in Russia’s government spending is primarily driven by the rising cost of its war against Ukraine.

Russia’s federal budget expenditures and deficit are expected to exceed official projections by more than 1 trillion rubles (approximately $12.85 billion), according to Reuters on July 16.

Russia’s official budget portal does not explain the reason for the increase. However, Reuters suggests it is most likely linked to higher military spending.

In 2025, Russia’s budget deficit grew to nearly five times its original target, reaching 5.7 trillion rubles, or 2.6% of GDP — the highest level since the COVID-19 pandemic in 2020.

The updated forecast for 2026 projects federal spending at 45.11 trillion rubles (about $580 billion), compared with 44.07 trillion rubles allocated under the current budget law.

Government revenues are expected to remain largely unchanged at 40.28 trillion rubles (around $520 billion). As a result, the budget deficit could reach 4.83 trillion rubles (roughly $62 billion), exceeding the 3.79 trillion rubles, or 1.6% of GDP, envisioned in the existing budget.

According to Russia’s Ministry of Finance, the budget deficit totaled 5.73 trillion rubles ($74 billion), or 2.5% of GDP, during the first half of the year—1.7 times higher than in the same period a year earlier.

Finance Minister Anton Siluanov acknowledged that the deficit would be slightly above the official forecast but insisted that it would not require a significant increase in domestic borrowing.

Analysts expect Russia’s budget deficit to remain above planned levels for at least the next two years. Meanwhile, the Finance Ministry has postponed its goal of achieving a zero primary budget deficit until 2029.

Earlier reports indicated that Russia’s budget deficit for January through April had already exceeded the official target by 50%, reaching 5.88 trillion rubles. The main reason was a decline in oil and gas revenues, although the deficit later narrowed slightly due to a temporary easing of U.S. sanctions and higher global oil prices.