Russia's budget gap widens to 2.5% of GDP, Kremlin downplays risks
Russia's federal budget deficit hit 5.8 trillion rubles, or 2.5% of GDP, in the first eight months of 2026, and the Kremlin says it is not alarming.
According to a preliminary report from the Finance Ministry, Russia's budget deficit expanded to 5.8 trillion rubles, representing 2.5% of GDP, over the first eight months of 2026—about one and a half times the deficit recorded in the same period last year. Expenditures surged 14.7% to 31.7 trillion rubles, outpacing revenue growth of 9.2% to 25.9 trillion rubles, as oil and gas receipts dropped 16.7% while non-oil revenues rose 18.1%.
The ministry attributes the spending jump to advance payments on state contracts early in the year. Kremlin spokesperson Dmitry Peskov called the deficit a "moving figure" and said it does not raise serious concerns for the economy's stability. Officials have not ruled out additional financing, planning to issue 5.5 trillion rubles of domestic debt for the full year, but high yields above 16% led to the cancellation of three bond auctions in June and July. Experts suggest the Finance Ministry is reluctant to borrow at such rates, leaving budget reserves and asset sales as alternative options.
