Budget deficit for two months exceeds annual target in Russia — intelligence
According to Ukrinform, the Foreign Intelligence Service of Ukraine stated this on its website.
In the first two months of the year, the cash gap has already exceeded the entire annual planned figure of $50.5 billion, indicating a complete loss of control over the fiscal trajectory.
The situation is further complicated by an unprecedented discrepancy between the reports of the Federal Treasury and the Ministry of Finance. The Treasury recorded revenues of $31.36 billion compared to $59.79 billion in the Ministry of Finance's report — nearly a twofold difference that goes beyond any technical margin of error. At the same time, expenditures are almost identical: $101.47 billion versus $103.10 billion, respectively.
Western economists interpret this gap as evidence of systemic uncertainty in budget accounting and a likely overstatement of revenues in the Ministry of Finance's forecasts. The minimal deviation in expenditures only confirms that the Kremlin does not intend to cut spending even amid a catastrophic drop in revenues.
The main factor behind the shortfall is the collapse in oil and gas revenues, which fell to $18.1 billion in the first quarter of 2026, declining by 45.5% year-on-year. This is the worst result since 2022. At the same time, expenditures remain inflated due to large-scale allocations for security and defense, creating a structural imbalance that cannot be resolved without a radical revision of priorities.
Russian analytical centers, including the pro-Kremlin CMACP, predict that the annual deficit will exceed official plans by two to three times, especially if energy revenues remain at current levels and spending continues to grow.
"The current situation demonstrates a breakdown in institutional coordination of the budget process, with agencies submitting conflicting data. The deficit will have to be covered by balances in treasury accounts and privatization proceeds – sources that do not ensure long-term sustainability," the intelligence service noted. If these trends continue, Russia will face the depletion of reserves and a choice between unpopular spending cuts and the search for new sources of financing. Even if energy prices recover, revenue growth potential will be constrained by weak investment activity, structural imbalances in industry, and logistical failures.
As Ukrinform reported, the Kremlin is planning to reduce support for the agricultural sector amid the budget crisis.
Photo: pixabay.com
