Defense spending continues to rise, while oil and gas revenues have significantly declined, causing a substantial year-on-year expansion of Russia's budget deficit.
The Russian Ministry of Finance reported that the federal budget deficit reached 6.01 trillion rubles, equivalent to 2.6% of GDP. This figure has doubled compared to the same period in 2025 and exceeds the annual deficit target of 3.79 trillion rubles by 1.6 times. The main reason is that fiscal expenditures increased by 17% year-on-year, while revenues rose only slightly by 0.3%. The ongoing Ukraine conflict and Western sanctions have led to a sharp increase in defense spending, which is the core factor behind this situation.
The Ministry of Finance stated that from January to May 2026, the federal budget deficit amounted to 6.01 trillion rubles, an increase of 2.981 trillion rubles compared to the same period last year.
In the first five months of this year, total federal budget expenditures reached 20.791 trillion rubles, with total revenues at 14.781 trillion rubles. Affected by the early-year decline in oil prices, oil and gas revenues dropped by 29.8%, indicating a clear impact from external factors on Russia’s fiscal system.
Previously, the Russian Ministry of Finance proposed cutting federal budget expenditures by 2.9 trillion rubles in 2026, though defense-related spending was excluded from these reductions.
Russian officials explained that the high deficit at the beginning of the year resulted from advance disbursements of various expenses, including rapid contract signings and prepayments.
Original source: toutiao.com/article/1867307212683276/
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