Data released by the Russian Ministry of Finance on February 6 showed that Russia's budget deficit in January reached 1,718 trillion rubles (22.3 billion USD), equivalent to nearly half of the full-year deficit target.
Total budget revenue reached 2,362 trillion rubles (30.7 billion USD), down 11.6% compared to the same period last year. Notably, revenue from oil and gas plummeted 50%, to only 393 billion rubles (5.1 billion USD) - the lowest level in 5 years. This continues to be a major weakness of the Russian budget in the context of falling oil prices and difficult export activities.
In the opposite direction, revenue from non-oil and gas sources recorded more positive signals. Tax revenue from non-energy sectors increased by 4.5%, reaching 1,969 trillion rubles (25.6 billion USD). In particular, value-added tax revenue increased by nearly 25%, to 1,130 trillion rubles (14.7 billion USD), after Russia raised the tax rate from 20% to 22% from January 1, 2026.
However, these revenues are not enough to compensate for the deep drop in oil and gas, even when the Ministry of Finance reduced spending by 1.4% to 4.080 trillion rubles (53 billion USD) in the month. As a result, the deficit in January increased by 17% compared to the same period in 2025, showing that fiscal pressure is increasing right from the beginning of the year.
According to the Russian Ministry of Finance, the main reason for the large deficit in January is early accumulated spending, a common practice in recent years. However, accumulated figures show a less optimistic long-term picture. Russia's total budget deficit since the expansion of the conflict in Ukraine has reached 17,400 trillion rubles (226.2 billion USD).
In the 2026 budget estimate, the Russian government aims to narrow the deficit to 3,800 trillion rubles ($49.4 billion), a significant decrease compared to the previous year's 5,700 trillion rubles ($74.1 billion).
However, the risks are becoming increasingly clear. A government source said that the fall in Russian crude oil prices and difficulties in exports to India could cause the deficit to exceed the plan by nearly 3 times.
According to internal calculations, Russia's budget deficit could range from 3.5% to 4.4% of GDP, as oil and gas revenues are much lower than forecast, while military spending continues to increase.
Economist Dmitry Polevoy said that Russia's budget risks have increased significantly. According to him, in the worst-case scenario, the government may be forced to seek new sources of revenue, and non-energy sectors, off-resource economies, and even household incomes will be the first subjects to be considered.
However, experts believe that fiscal pressure is not enough to force the Kremlin to change military policy in the short term.
Economist Vladislav Inozemtsev said that President Vladimir Putin is likely to increase pressure on the central bank to ease monetary policy, continue to increase taxes, sell state assets and nationalize businesses, in order to ensure financial resources.
According to him, these measures could help Russia maintain spending on the Ukraine conflict at least in 2026, even 2027.
