Russia’s Budget Deficit Reaches 5.8 Trillion Rubles Through August, Exceeding Revised Target
Key Facts
Russia’s budget deficit reached 5.8 trillion rubles, or $72 billion, through August 2026, up nearly 50% from the same period a year earlier and exceeding the revised annual target of 4.8 trillion rubles, according to the Kyiv School of Economics, as cited by the Associated Press. The overshoot of the revised target puts pressure to finance government spending, led by military outlays, at the center of Russia’s fiscal debate. The coverage links the widening deficit to weak growth amid sanctions, higher interest costs for nonmilitary companies, and labor shortages. It also cites Ukrainian attacks on oil refineries and export terminals among the pressures. This comes as the government considers new taxes on mining profits and some personal income in an effort to raise revenue.
The proposals include a tax on windfall profits at mining companies benefiting from higher commodity prices, at rates ranging from 20% to 30%, with a 20% rate for gold cited in the proposal details. The price increase would be calculated by comparing prices denominated in rubles with a baseline dating to 2025. The metals covered include ferrous metals, nickel, and gold. According to the Associated Press, another proposal targets interest income, dividends, and proceeds from property sales by raising rates to a range of 13%–22%. The two current rates cited for this income are 13% on amounts below 2.4 million rubles and 15% on amounts above that threshold. The proposal would widen the tax range compared with the current rates cited by the agency.
The proposed measures extend beyond mining and investment and property income; they include a 100-ruble fee per parcel and a 22% value-added tax on foreign goods bought online worth less than 200 euros, which were previously exempt. The measures are due to take effect on January 1, according to the Associated Press. These provisions broaden the scope of tax changes to cover parcels and goods imported through e-commerce, alongside the income sources targeted by the other proposal. Meanwhile, the government expects economic growth of 0.6% in 2026. These estimates come as the agency describes growth as weak amid sanctions, with labor shortages continuing and borrowing costs for nonmilitary companies remaining high.
Data for a later period through August show a wider gap between execution and the original 2026 plan: the federal budget deficit was 5.186 trillion rubles, or 2.2% of gross domestic product, in the first nine months of the year, according to preliminary data cited by Interfax from Russia’s Finance Ministry. The original deficit plan was 3.786 trillion rubles, or 1.6% of GDP. The annual deficit target for 2026 has risen to 3.2% of GDP, double the previous target of 1.6%, according to a Reuters report cited by Investing.com. This is paired with an expected 13% increase in spending during the year, driven mainly by military outlays. The figures show the deficit widening beyond initial targets, with the nine-month outcome and annual estimate covering different periods.
The fiscal pressure extends to the draft 2027 budget, which projects a deficit of 5.443 trillion rubles, or 2.2% of GDP, compared with an earlier estimate in the budget of 3.186 trillion rubles, or 1.2%, according to Interfax. Finance Minister Anton Siluanov said the average expected deficit over the following three years was about 2% of GDP annually, describing it as a “small deficit” under current conditions. That forecast places a multiyear average alongside an expected increase in the 2027 deficit compared with the previous figure. While the government forecasts growth of 0.6% in 2026, budget estimates point to continued financing needs in the following years. Some tax measures are due to begin on January 1, while the figures cited do not specify another implementation date for the remaining proposals.