Minus 5.2 trillion: why Russia's budget is in deficit even as revenue grows

Russia's Finance Ministry estimated the federal budget deficit for January–October 2026 at 5.23 trillion rubles, or 2.3% of GDP. Revenue rose 11%, but spending grew faster. Where the gap comes from, who covers it and what awaits the budget in 2027.

Kurs Media editorial team11 November 2026, 15:29

A 5,000-ruble Bank of Russia banknote. Photo: Bank of Russia; digitized by the Museum of the National Bank of Belarus, Public domain

A year ago, when the State Duma passed the 2026 budget, the deficit in it looked modest: 3.786 trillion rubles, or 1.6% of GDP. By early November that number belonged to the past. On Tuesday evening the Finance Ministry published its preliminary estimate: over ten months, the federal budget spent 5.234 trillion rubles more than it took in. That is 2.3% of GDP — 1.4 times what the law allowed for the entire year.

And yet more money came into the treasury than a year earlier. Revenue for January–October rose 11%, to 33.2 trillion rubles. Spending simply grew faster: up 13.4%, to 38.4 trillion.

Oil gives way to VAT

Only a few years ago, the fate of Russia's budget was decided in Riyadh, in Vienna and on the oil exchanges. In 2026, the treasury's main breadwinner became the tax every shopper pays at the checkout.

Oil and gas revenue fell 14.1% over ten months, to 6.44 trillion rubles. The ministry attributes this to a strong ruble — every barrel sold brought the budget fewer rubles — and to larger damper payments to oil companies, which rise when global fuel prices are high.

Non-oil and gas revenue, by contrast, grew 19.1%, to 26.7 trillion rubles. Almost half of it came from VAT: 14.7 trillion, up 27.8% from a year earlier. Both the increase in the base rate to 22% from January 1, 2026, and inflation, which swells receipts, played a part.

October showed that it is too early to write oil off. Oil and gas receipts for the month reached 971.2 billion rubles — the highest in a year and a half and 8.5% more than in October 2025. Even that was not enough: judging by the difference between the ministry's nine- and ten-month estimates, the budget ended October with a deficit of about 48 billion rubles. In August and September before that, the treasury had been in surplus.

How the deficit doubled

The Finance Ministry began preparing the market for the new reality back in the summer. "We will adjust the parameters of the current year and the current deficit," Finance Minister Anton Siluanov said at the St. Petersburg International Economic Forum in June, promising that this would not lead to a significant increase in borrowing.

In September, at the Moscow Financial Forum, he was already speaking of a deficit within 3% of GDP. At the same time, the ministry raised its full-year estimate to 7.345 trillion rubles, or 3.2% of GDP — almost twice what the law had set. The ministry's explanation: higher spending on priority areas and a drop in base oil and gas revenue. Siluanov named the priorities plainly: defense and security.

That leaves the budget about 2 trillion rubles of additional deficit for the last two months of the year. That is not necessarily a failure: December is traditionally Russia's month of heaviest spending, when ministries and regions close out their annual commitments.

Who pays the bills

The Finance Ministry insists that the gap is being closed mostly without additional borrowing on the OFZ market. But the spare wallet is already ajar: on November 5, the government allowed the ministry to borrow up to 1 trillion rubles on the domestic market above the approved program. The ministry is not obliged to use the full limit.

The budget has its limits, too. The spending ceiling can be raised only through additional non-oil and gas revenue and other sources of deficit financing — within 3 trillion rubles.

The $50 rule

For 2027, the Finance Ministry has set a deficit of about 2% of GDP and a new fiscal rule: spending will be calculated based on an oil price of $50 a barrel instead of $59. Siluanov called such a budget risk-free — "with a deficit that does not pose any risks."

The logic is simple: the lower the cut-off price, the less the budget depends on oil and the more oil money goes into reserves rather than current spending. But that logic has a price. By the minister's own count, the switch to $50 costs almost a trillion rubles of spending, which now has to be either cut or covered by other taxes. Kurs Media wrote about the new rule in detail in October (in Russian).

In October, oil brought the budget more than in any month in the past year and a half. And still the month ended in the red.