The Russian authorities have imposed strict restrictions on budget spending due to the rapid growth of the deficit and a shortage of funds. UNN writes about this, citing The Moscow Times.
Details
Since April, spending under most budget items has been cut by 35%. The restrictions do not apply to defense, social payments, salaries for public-sector employees, subsidies to regions, or servicing the national debt. Agencies were also instructed to postpone nonessential spending and prepare to reduce staff by 15%.
According to Bloomberg, the decision was made after Russia's Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that the budget might not have enough funds to make all payments on time. At that point, the federal treasury deficit had already reached 5.5 trillion rubles.
The deficit exceeded the annual plan
When planning the 2026 budget, Russia's Finance Ministry expected to reduce last year's deficit of 5.7 trillion rubles to 3.7 trillion through increases in VAT and taxes for small businesses. However, by the end of the first quarter, the deficit had already exceeded the plan for the entire year and amounted to 4.5 trillion rubles.
By the end of the second quarter, the budget "hole" had grown to 5.7 trillion rubles, and by early August—to 6.5 trillion. According to Russia's Electronic Budget system, as of August 24, the deficit had reached 8.654 trillion rubles.
Russia continues to spend on the war
According to Bloomberg sources' estimates, by the end of the year the deficit could grow to approximately 9 trillion rubles, or 3.2–3.8% of GDP. This would exceed even the Russian central bank's most pessimistic forecast of 8.2 trillion rubles.
Despite its financial problems, the Russian authorities do not currently consider the situation critical and expect that the country will be able to finance the continuation of the war against Ukraine for several more years. At the same time, cuts in civilian spending are already being used to contain further growth in the budget deficit.