Russia's budget deficit hits 6.5 trillion rubles in seven months, nearly double annual plan

Russia's federal budget deficit reached 6.455 trillion rubles in January–July, or 2.8% of GDP, according to preliminary data from the Finance Ministry. That is already 70.5% above the 3.786 trillion rubles (1.6% of GDP) deficit planned for the entire 2026 fiscal year in the budget law.

In July alone, the budget went into the red by roughly 724 billion rubles. The previous month had brought a brief respite — a short surplus of about 196–280 billion rubles — which temporarily narrowed the accumulated deficit, but July's widening gap between revenues and spending resumed the trend.

The seven-month accumulated deficit exceeds the result for the whole of 2025 by approximately 850 billion rubles, when the budget closed with a deficit of 5.6 trillion rubles. Last year, the budget deficit was nearly five times the government's original plan, becoming the largest since 2020 as a share of GDP — 5.7 trillion rubles, or 2.6% of GDP.

Revenues in January–July reached 22.112 trillion rubles, up 8.8% year-on-year. Spending rose 14.5% to 28.567 trillion rubles, outpacing revenue growth by 5.7 percentage points.

Oil and gas revenues fell 16.8% to 4.595 trillion rubles, reflecting lower oil prices in earlier periods. Hydrocarbon receipts now account for about 21% of all federal budget revenues. The state has so far compensated for the shortfall in oil and gas collections with non-oil revenues, which grew 18.3% to 17.518 trillion rubles, while VAT receipts jumped 24.9% to 9.791 trillion rubles.

The growth in non-oil revenues comes as the main VAT rate rises from 20% to 22% starting in 2026. When the tax changes were being discussed, the government estimated the rate increase alone would bring in an additional 1.2 trillion rubles per year and promised the money would go toward defense and security funding.

The Finance Ministry attributes the high accumulated deficit "mainly to advance financing of expenditures" — accelerated signing of state contracts and advance payments early in the year. The published estimate does not break down spending by category, so it is impossible to determine from this data which items drove the increase.

The government already expects the final deficit to exceed the figure written into the budget law. According to data from the Electronic Budget portal, reviewed by Reuters in July, year-end spending could reach 45.11 trillion rubles instead of the 44.07 trillion rubles stipulated by law. With revenues holding at 40.28 trillion rubles, that would imply a deficit of about 4.83 trillion rubles — though the accumulated figure already exceeds that estimate by roughly 1.6 trillion rubles.

Finance Minister Anton Siluanov said in June that the annual deficit forecast would "increase somewhat." The Center for Macroeconomic Analysis and Short-Term Forecasting (TsMAKP), which is close to the government, estimates the 2026 budget deficit could grow to 7 trillion rubles, or 3.0% of GDP.