16 December 2025
The Russian government plans to increase public debt sixfold over the next 17 years to cover the chronic budget deficit, according to a long-term budget forecast approved by Prime Minister Mikhail Mishustin.
According to the document, in the baseline scenario, Russia’s total public debt will increase from 38.5 trillion rubles this year to 238.5 trillion by 2042, an increase of 200 trillion rubles. Relative to the size of the economy, public debt will almost double, from 17.7% of GDP to 32.2% of GDP.
In the second half of the 2020s, the government plans to borrow 0.5% of GDP annually for the budget. According to the forecast, debt growth will accelerate to 0.7% of GDP annually in the early 2030s, to 1% of GDP annually by the middle of the next decade, and to 1.2-1.3% of GDP by the early 2040s.
The Ministry of Finance will be forced to raise debt due to the budget deficit, which is planned for each year until 2042. This year, the treasury deficit is estimated at 2.6% of GDP, next year it is planned to shrink to 1.6% of GDP, and by 2030, to 1.1% of GDP. However, in the next decade, the budget situation will begin to deteriorate again: the deficit will grow to 1.8% of GDP by 2035, 2.6% in 2040, and 2.9% in 2042.
Oil and gas revenues will become a “headache” for the government, according to the forecast: their share of GDP will halve over the next 17 years—from 4% of GDP to 1.9% of GDP. “As the depletion of developed reserves increases, and investments are shifted to preferential fields, the share of fields with a reduced effective tax rate in the production structure will continue to grow,” the government explains in the forecast. As a result, even with stable non-resource revenues (12-13% of GDP), total treasury revenues will decline from 17.1% of GDP to 14.1% of GDP.
The Kremlin no longer has the reserves to plug budget holes. The liquid assets of the National Welfare Fund, which it has been accumulating for years from excess oil revenues, barely exceed 4 trillion rubles. This amount will only cover one year’s budget deficit (3.8 trillion rubles next year), and the Ministry of Finance has no plans to spend the nest egg. The government included zero expenditures from the National Welfare Fund in the 2026-2028 budget law.
The government has squandered the National Welfare Fund, and Russian banks have become virtually the only buyers of Russian government debt, notes Elina Rybakova, a senior fellow at the Peterson Institute for International Economics. The Central Bank, in turn, provides the banks with the funds. Since the end of last year, it has been conducting weekly repo operations, offering credit institutions ruble loans secured by OFZs. According to the Central Bank’s own data , the volume of such operations reached 3.2 trillion rubles as of December 15.
Essentially, this is “indirect emission financing of government debt by the Central Bank of the Russian Federation,” experts at the Gaidar Institute wrote in November. Expanding this practice “increases the inflationary effect,” they warned.
Ouch!
Never trust any numbers coming from the crime syndicate. This purported debt is only a fraction of the actual debt that will accrue, and the purported timeframe is only a fraction of what reality demands.
Great news. The printing press must be working overtime to produce toilet paper.