Russia's 2026 Budget Deficit to Reach 3% of GDP, Finance Minister Says
Russia expects a budget deficit of 3% of GDP in 2026, nearly double its target, with higher borrowing and oil windfall funds used to cover the gap.
Russia's budget deficit will come in at about 3% of gross domestic product in 2026, Finance Minister Anton Siluanov said, roughly twice the level the government had targeted and more than the previous year's shortfall.
The remarks came as the government prepares to review the draft budget for 2027 this week. Moscow had raised taxes this year in an effort to bring the deficit down to 1.6% of GDP from 2.6% in 2025, but the gap already stood at 2.5% of GDP in the January-August period.
Siluanov said additional funding needs and expenditures had emerged during the execution of the budget, and that extra sources of financing would be arranged to meet them.
Spending pressures have come from several directions. Russia has had to strengthen its air defences after Ukrainian drone strikes on economic infrastructure including refineries, ports and e-commerce warehouses, while also funding measures to ease fuel shortages across the country.
Revenue from oil exports has risen on higher global prices amid the war in the Middle East and on a weaker rouble, which tends to lift state income from exports. Siluanov said the government expects revenues to improve further in the coming months and plans to channel the oil windfall into fiscal reserves.
To cover the deficit, the state will borrow more than the 5.5 trillion roubles ($65.7 billion) originally planned and will also use leftover funds from earlier years. Siluanov said the additional borrowing posed no risk to the financial system.
President Vladimir Putin said last week that the deficit is expected to fall to about 2% in 2027, with oil and gas revenues rising in the months ahead. Siluanov said such a path would create room for further easing of monetary policy, adding that coordination with the central bank was in place and that falling inflation, inflation expectations and interest rates were the key priorities.
Russia carries a low overall state debt, but servicing costs have climbed because of high interest rates. The central bank said the current deficit projections were in line with its expectations.
Siluanov also said the National Wealth Fund, whose gradual depletion has been flagged by analysts as a key budget risk, will grow by between 600 billion and 1 trillion roubles to reach 5 trillion roubles by the end of 2026.