As Russia’s federal budget draft for 2027-2029 was submitted to the State Duma, the projected deficit for 2026 rose to 7.345 trillion rubles. This is nearly double the previous estimate of 3.785 trillion rubles.
Under the new calculation, the deficit will equal 3.2% of gross domestic product. The previous projection had put the figure at 1.6%.
Nearly 16 trillion rubles in deficits expected over three years
The draft projects that the budget deficit will reach 5.443 trillion rubles, or 2.2% of gross domestic product, in 2027. The same indicator is expected to reach 5.12 trillion rubles, or 1.9%, in 2028, and 5.245 trillion rubles, or 1.9%, in 2029.
These projections mean the total deficit over 2027-2029 will amount to approximately 16 trillion rubles, or $192 billion. The government said it aims to improve long-term planning through the three-year budget.
Oil price assumption set at $50 per barrel
The government said the draft was important for maintaining macroeconomic stability and reducing inflation. The document sets an annual inflation target of 4% and assumes an oil price of $50 per barrel.
Nominal gross domestic product is expected to rise by 1.4% to 248.3 trillion rubles in 2027. According to the draft’s projection, it will increase by 2.4% to 281.7 trillion rubles in 2029.
Military spending increases pressure on the budget
Russia’s budget balance has gradually deteriorated over the four and a half years since the start of the full-scale war in Ukraine. The country has drawn on its fiscal reserve fund, increased borrowing and raised taxes to finance rising military spending.
Defense spending is expected to rise by 27% to 17.1 trillion rubles in 2027. This amount would account for more than one-third of federal spending. While budget documents detail only 2.3 trillion rubles of the total, the remainder has been kept classified.
Classified spending is expected to account for 34.9% of total budget expenditure in 2027. Vladimir Putin said last month that the budget deficit did not pose a critical risk to the Russian economy and that it would be managed. Economists, meanwhile, assess that deficits equivalent to 4-5% of gross domestic product are manageable.
First reading scheduled for October 29
Andrey Makarov, chairman of the State Duma Budget Committee, announced that the first reading of the budget bill in the three-stage review process would take place on October 29.
