There Is A Record "hole" In The Russian Budget
- 8.05.2026, 20:17
Even rising oil prices did not save the Russian economy.
Russia's federal budget deficit in the first four months of the year alone reached a record 5.88 trillion rubles, compared to the planned 3.79 trillion. That is, as of early May, the aggressor country had already spent 55% more than it planned to spend for the entire year, and the rise in oil prices due to the escalation in the Gulf of Hormuz has not remedied the situation.
This was reported by Bloomberg. The fiscal crisis deepened in April even as the average price of Russian oil used for taxation rose to $94.87 a barrel in April.
Causes of the fiscal crisis
There are several reasons for Russia's deepening budget deficit. In particular, it occurred due to a 4.5% reduction in revenues (to 11.72 trillion rubles) due to:
the 38.3% collapse in oil and gas revenues;
while the 10.2% growth in non-oil revenues could not compensate for losses from the energy sector.
Expenses, meanwhile, rose by 15.7% to 17.6 trillion rubles, which is already 40% of the annual plan, although there are still 8 months left until the end of the year. The main reason is a 41% increase in government purchases.
Central Bank sounds the alarm
The Bank of Russia has openly expressed skepticism about the possibility of meeting the annual targets. In a summary of its April key rate meeting, the regulator noted that "the historically high trajectory of spending execution in early 2026 may indicate that the fiscal impulse at year-end will be larger than projections suggest."
This means a more cautious path of key rate cuts - and less chance of relief for an economy already teetering on the brink of recession after a long period of high interest rates. Economists also don't believe the Finance Ministry will meet its annual target and expect new tax initiatives.
Russia's record labor shortage
In April, Russia faced its first systemic labor shortage, which is already limiting economic development and putting additional pressure on businesses. Despite low unemployment, the shortage of personnel will only grow and may exceed 3 million workers in the coming years.
If earlier the main challenges were external factors - sanctions, fluctuations in resource prices or exchange rates, now another critical factor has been added to them, because there are simply not enough people to work. She emphasized that this problem has already become a new reality, which both business and public policy have to take into account.