Compared to last year, the "gap" in the consolidated budget, which includes the federal treasury, regional budgets, and extra-budgetary funds (the Pension Fund and the Compulsory Medical Insurance Fund), increased by 2.6 times, or 5.696 trillion rubles. Budget revenues at all levels grew by 6.5% over the year—half as fast as expenditures, which jumped 13%.
Two-thirds of the final deficit came from the federal treasury: it ended the year with a "gap" of 5.625 trillion rubles, five times greater than the original plan. Regional budget deficits set a record for the two decades of publicly available government statistics: 1.5 trillion rubles.
The Social and Pension Insurance Fund deficit, almost three times higher than planned, reached a record high of 1.078 trillion rubles. Finally, the Compulsory Medical Insurance Fund, which pays for state healthcare programs, suffered an 80.7 billion ruble deficit.
It's noteworthy that the deficits grew despite the increased tax burden, notes Natalia Orlova, Chief Economist at Alfa Bank. Last year, the Ministry of Finance raised the corporate income tax, introduced a differentiated personal income tax scale, and planned to collect over 3 trillion rubles in additional revenue.
But this year, taxes have had to be raised again: VAT has been increased to 22%, a tax reform for small businesses has been launched, and next in line are the technology levy, the tax on imports from marketplaces, export duties on diamonds, and an increase in the mineral extraction tax for metallurgists.
"The Russian economy has entered the death zone," writes Alexandra Prokopenko, a research fellow at the Carnegie Russia Eurasia Center in Berlin. This is the mountaineering term used by mountaineers for altitudes above 8,000 meters, where the human body consumes itself faster than it can regenerate.
A similar phenomenon is happening with the economy, Prokopenko believes: it is staying afloat by diverting resources—financial and human—to the military sector, but this is destroying its long-term potential. It is precisely because of the economy's weakness that the budget cannot be patched by raising taxes, Prokopenko points out: last year, GDP grew by only 1%, and forecasts for this year are even worse.
Last year's situation will likely repeat itself this year: the Ministry of Finance will not be able to collect the planned amount of taxes, according to Oleg Vyugin, former First Deputy Chairman of the Central Bank and professor at the Faculty of Economics at the Higher School of Economics. Russia is entering 2026 with higher taxes and high interest rates, which, according to Vyugin, could result in a "recession." Added to this is the problem of shortfalls in oil and gas revenues due to the ruble exchange rate and restrictions on oil exports, as well as the ongoing discount to Brent of $29 per barrel, the expert notes.
Two-thirds of the final deficit came from the federal treasury: it ended the year with a "gap" of 5.625 trillion rubles, five times greater than the original plan. Regional budget deficits set a record for the two decades of publicly available government statistics: 1.5 trillion rubles.
The Social and Pension Insurance Fund deficit, almost three times higher than planned, reached a record high of 1.078 trillion rubles. Finally, the Compulsory Medical Insurance Fund, which pays for state healthcare programs, suffered an 80.7 billion ruble deficit.
It's noteworthy that the deficits grew despite the increased tax burden, notes Natalia Orlova, Chief Economist at Alfa Bank. Last year, the Ministry of Finance raised the corporate income tax, introduced a differentiated personal income tax scale, and planned to collect over 3 trillion rubles in additional revenue.
But this year, taxes have had to be raised again: VAT has been increased to 22%, a tax reform for small businesses has been launched, and next in line are the technology levy, the tax on imports from marketplaces, export duties on diamonds, and an increase in the mineral extraction tax for metallurgists.
"The Russian economy has entered the death zone," writes Alexandra Prokopenko, a research fellow at the Carnegie Russia Eurasia Center in Berlin. This is the mountaineering term used by mountaineers for altitudes above 8,000 meters, where the human body consumes itself faster than it can regenerate.
A similar phenomenon is happening with the economy, Prokopenko believes: it is staying afloat by diverting resources—financial and human—to the military sector, but this is destroying its long-term potential. It is precisely because of the economy's weakness that the budget cannot be patched by raising taxes, Prokopenko points out: last year, GDP grew by only 1%, and forecasts for this year are even worse.
Last year's situation will likely repeat itself this year: the Ministry of Finance will not be able to collect the planned amount of taxes, according to Oleg Vyugin, former First Deputy Chairman of the Central Bank and professor at the Faculty of Economics at the Higher School of Economics. Russia is entering 2026 with higher taxes and high interest rates, which, according to Vyugin, could result in a "recession." Added to this is the problem of shortfalls in oil and gas revenues due to the ruble exchange rate and restrictions on oil exports, as well as the ongoing discount to Brent of $29 per barrel, the expert notes.
