Russia’s federal budget posted a deficit of 1.718 trillion rubles ($22.3 billion) in January, nearly half of the full-year target. This is clear from data of the Ministry of Finance, published on Friday, reports “Moscow Times”.
Budget revenues totaled 2.362 trillion rubles ($30.7 billion) for the month, down 11.6 percent from a year earlier.
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Oil and gas revenue fell 50 percent to a five-year low of 393 billion rubles ($5.1 billion).
Revenues from taxes other than oil and gas increased by 4.5% to 1.969 trillion rubles ($25.6 billion).
VAT receipts jumped almost 25% to 1.13 trillion rubles ($14.7 billion) after the VAT rate was raised to 22% from January 1.
Those revenues, however, proved insufficient to offset a sharp decline in energy revenues, even after the Finance Ministry slightly cut spending by 1.4 percent to 4.08 trillion rubles ($53 billion).
As a result, the deficit for January exceeded that of January 2025, reaching 17%.
Overall, Russia’s budget deficit has reached 17.4 trillion rubles ($226.2 billion) since the full-scale invasion of Ukraine, according to Treasury data.
The department attributed the large deficit at the beginning of the year to pre-arranged costs.
The 2026 budget projects the annual deficit to shrink to 3.8 trillion rubles ($49.4 billion) in 2026 from 5.7 trillion rubles ($74.1 billion) last year.
However, the fall in Russian crude oil prices and difficulties in exporting oil to India could see the deficit nearly triple, a government source revealed.
Internal estimates show the shortfall could reach 3.5 percent to 4.4 percent of GDP as oil and gas revenues fall well short of forecasts and military spending rises, he said.
The Treasury is likely to propose spending cuts to close the gap, the source added.
Budget risks have obviously increased, said economist Dmitry Polevoy.
“In a negative scenario, authorities are likely to be forced to look to new sources of revenue, with the non-energy commodity sectors, the wider non-resource economy and even household income being among the first in the queue,” he explained.
Despite mounting pressure, budget woes are unlikely to prompt President Vladimir Putin to end hostilities anytime soon, economist Vladislav Inozemtsev predicts.
“Putin will encourage the Central Bank to print money; he will continue to raise taxes, sell state property and nationalize business corporations,” he stressed. “This will allow him to get enough money to wage the war for 2026 and, most likely, 2027.”
The key uncertainty for the budget is whether Russia will adapt to new sanctions that have led to discounts on its oil, investment banker Yevgeny Kogan noted.
If not, the authorities will face “painful decisions” in the second half of the year, including spending cuts, tax hikes and increased borrowing, he added.
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Assessment 3.7 from 67 voice.
date:2026-02-09 16:33:00