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2026-07-16 15:32:12
[Russia's 2026 budget deficit may exceed the plan by more than $12.8 billion, with increased spending exacerbating fiscal pressure] (1) According to data from the government budget portal, the Russian Federation's spending in 2026 is expected to rise to 45.11 trillion rubles (higher than the 44.07 trillion rubles stipulated in the budget law), with a deficit of 4.83 trillion rubles, exceeding the official plan of 3.79 trillion rubles by more than 1 trillion rubles (approximately $12.85 billion). (2) The reasons for the increased spending have not been clearly stated, but it may be related to the rise in military spending related to the war in Ukraine; the Central Bank of Russia has repeatedly warned that the widening budget deficit poses a major inflation risk, which may affect the interest rate decision at next week's policy meeting. (3) The budget deficit in the first half of this year has reached 5.73 trillion rubles (2.5% of GDP), 1.7 times that of the same period last year. Finance Minister Siluanov said the deficit will only increase "slightly" and promised not to significantly expand domestic borrowing, but the budget gap in the next two years will still be higher than planned. The goal of achieving zero basic deficit has been postponed to 2029 (the deficit in 2025 will be nearly five times the target, at 2.6% of GDP).
