Jens Asbjørn Bøgen
The deficiit has doubled compared to a year ago.
Imagine you had a look at your personal budget only to see a massive gap between what you earn and what you spend.
Then imagine seeing that deficit double in just one year, and the deficit already being 160% of what you planned for the entire year.
Such a situation would probably call for some changes in the household, but apparently it is not a crisis.
At least not when you’re Russia.
Six trillion rubles down
According to news agency Interfax, cited by The Moscow Times, the Russian Ministry of Finance downplayed a massive surge in the federal treasury deficit.
The gap climbed past six trillion rubles (83 billion USD) by late May.
Deputy Finance Minister Irina Okladnikova told the State Duma on Wednesday that there is no need to panic.
“We don’t believe we have a budget crisis. (…) The budget is being implemented according to schedule,” Okladnikova said, adding that budget expenditures are “moving a little faster” than before, and this “impacts the deficit figures.”
Massive funding gap
Data from the Ministry of Finance reveals a stark contrast.
Over the first five months of the year, the federal budget collected 14.781 trillion rubles in revenue.
Meanwhile, government spending skyrocketed to 20.791 trillion rubles, leaving a deficit of 6.01 trillion rubles.
This gap is twice as large as it was during the same period last year, and it is already 1.6 times higher than the full-year plan for 2026.
Energy markets in particular have taken a toll, as oil and gas revenues plunged by 30 percent from January to May, though other sectors saw a 12 percent rise. This is likely caused by Ukraine’s ongoing long-range strike campaign targeting Russian energy infrastructure.
Blaming local debts
The overall government spending increased by 17 percent, but total revenue remained unchanged.
Okladnikova insisted the situation is under control, blaming bad local debts and rising state costs.
“We are seeing a slightly larger increase in the deficit, but again, this is due to the fact that regions are not repaying their debts,” Okladnikova said.
She noted that certain expenses “should increase in the current situation, and there is no point in not confirming this; it is a given.”
Tax hikes coming
To address the massive deficit, the Federal Tax Service is now pushing regional governments to raise taxes on local residents and businesses.
According to The Moscow Times, citing the Russian news outlet RBC, these directives came straight from the top. President Vladimir Putin directly ordered local authorities to slash their deficits as quickly as possible to avoid a fiscal crisis.
By early June, governors had to submit their final proposals.
Reports from RBC show that the tax service wants regions to maximize transport tax revenues immediately. It also wants to expand property taxes based on market values. Local officials have even been instructed to identify improperly used land so that tax rates can be increased severalfold.
