19 January 2026
Russia’s 2025 federal budget was written in deficit for the fourth year in a row: government revenues fell short of expenditures by 5.645 trillion rubles, the Finance Ministry reported on Monday.
Compared to 2024 (3.471 trillion rubles), the treasury deficit has grown 1.6 times, and in relative terms—2.6% of GDP—set a record since 2020 (3.8% of GDP).
Oil and gas revenues plummeted by 24% year-on-year, to 8.393 trillion rubles, according to Finance Ministry data. The budget was based on an oil price of $70 per barrel, but stricter sanctions forced the price to fall below $40 in December, averaging $52 for the year. Non-oil and gas revenues increased by 13% year-on-year to 28.807 trillion rubles, but were almost 552 billion rubles below the Finance Ministry’s initial plan .
Last year, the government raised the corporate income tax (from 20% to 25%), introduced a differentiated personal income tax scale, and increased duties and excise taxes, promising to raise 3.6 trillion rubles in additional revenue for the budget and reduce the budget deficit to 1.2 trillion rubles. In fact, revenues increased by only 575 billion rubles (1.6%), and in real terms—adjusted for inflation—they began to shrink. As a result, the “gap” is five times larger than the initial projections. Economist Viktor Tunev notes that
revenues for Russia’s entire budget system, including regional budgets, the Pension Fund, and the Compulsory Medical Insurance Fund, have shown virtually no growth for the third year in a row: last year, they were 91 trillion rubles, the year before—89 trillion, and in 2023—87 trillion. “We raise taxes every year, but they don’t bring anything into the treasury,” Tunev notes. “Incomes are steadily declining in real terms and relative to GDP.”
Actual revenues from key items were significantly lower than planned due to “worsening economic conditions,” notes Emil Ablaev, an expert at the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF): economic growth slowed to near zero, corporate profits began to decline, and foreign trade revenues sank due to the tightening of sanctions.
As a result, instead of shrinking, the budget deficit widened, and compared to the size of the economy, it has become one of the highest in the past two decades. Aside from the year of the pandemic, the only times the treasury has been larger were during the global financial crisis in 2009 (4.6% of GDP) and after the wave of sanctions for the annexation of Crimea (3.5% of GDP in 2016).
In the 2026 budget, the Ministry of Finance has once again projected a deficit reduction to 3.6 trillion rubles, hoping to replenish the treasury through a VAT increase and a radical tax reform for small businesses. However, the government’s expectations for oil and gas revenues may once again prove overly optimistic, warns Sergey Konygin, chief economist at Sinara Bank.
The budget assumes a Urals price of $59 per barrel (compared to $39 currently) and a dollar exchange rate of 92.2 rubles (compared to 77.7 rubles currently). This promises a revenue shortfall and a deficit 1.5 times higher than planned—approximately 5.2 trillion rubles, according to Konygin. If oil and the ruble remain at current levels, the Ministry of Finance will have to “open up” the National Welfare Fund and draw 2.5 trillion rubles from it, according to analysts at Tverdye Tsifr. This represents almost 60% of the fund’s remaining available funds (4.1 trillion rubles).
If the Central Bank keeps interest rates high and oil and gas revenues decline, Russia will face a difficult choice: raise taxes again, cut spending, or increase debt, Konygin warns.
“Russia will face a difficult choice: raise taxes again, cut spending, or increase debt, Konygin warns.”
They have an easier choice. Get your scum out of Ukraine.
Sorry, but i’m reading stories about ruSSia’s economic collapse for more than a decade, yet the shitters are still on…
An economic collapse is a slow procdess, mike, especially for a large shithole. The more shit you got in the toilet, the more you gotta flush before it’s finally down the drains.