Russia Revises Budget to Cover $28 Billion War Overspend, Weighing $40.8 Billion in Spending Freezes
Updated
Updated · The Independent · May 29
Russia Revises Budget to Cover $28 Billion War Overspend, Weighing $40.8 Billion in Spending Freezes
6 articles · Updated · The Independent · May 29
Anton Siluanov said Russia is revising its 2026 budget to redirect more money to defence and security, after Ukraine war costs blew at least ₽2 trillion ($28 billion) past plan.
A February letter from the finance minister urged the cabinet to freeze about ₽2.9 trillion ($40.8 billion) in non-military spending, warning the overspend could widen to ₽4 trillion in a negative scenario.
Russia had budgeted ₽16.84 trillion for defence and security—about two-fifths of total spending—but its planned ₽3.8 trillion deficit had already widened to ₽5.9 trillion by April, the biggest since the 2022 invasion.
The squeeze comes as Russia's battlefield gains slow sharply: the Institute for the Study of War said Russian forces seized 104 sq km through May 26, versus 1,619 sq km in the same period of 2025.
Oil prices lifted by the Iran war have helped cushion the strain, but Moscow has still cut growth forecasts to 0.4% for 2026 and 1.4% for 2027, underscoring pressure on its war-driven economy.
As Ukrainian drones cripple Russian oil, is Putin's war economy spiraling toward a catastrophic collapse?
With its war chest shrinking, which will break first: Russia's military offensive or its domestic economy?
Russia’s Fiscal Meltdown 2026: Budget Deficit, Reserve Drain, and War Economy Risks
Overview
In 2026, Russia is facing a deepening budget crisis driven by weaker oil and gas revenues, slower economic growth, and rising debt-servicing costs. These internal challenges are made worse by ongoing international sanctions, high interest rates, and persistent labor shortages. As a result, the Russian government has publicly acknowledged the need for drastic measures, including significant spending cuts. This combination of economic pressures and official responses highlights the severity of Russia’s fiscal situation, as the government struggles to balance its commitments amid mounting financial strain and limited options for recovery.