System Resources

The aggressor’s financial system is entering a tailspin. In January-February 2026, the federal treasury recorded a deficit of 3.449 trillion rubles—nearly 1.5 times higher than the same period last year. The Ministry of Finance admits that oil and gas revenues have plummeted by half, to 826 billion rubles, driven by falling prices and forced production cuts. The Budget Gap and Inflation Trap The situation is critical: the state is spending nearly twice as much as it collects in taxes—8.21 trillion compared to 4.76 trillion rubles. Non-commodity revenues formally grew by 4.1%, but in real terms, adjusted for inflation, they actually shrank by 1.6%. In just two months, the deficit has nearly hit the full-year target of 3.78 trillion rubles, casting doubt on the fulfillment of any social obligations. Sequestration for the Sake of War Alexander Kolyandr, a senior fellow at CEPA, notes that the budget has already been “torn to shreds.” For Europe, it is clear that Moscow’s resource base is exhausted. To save the situation, authorities are preparing to sequester civilian spending and alter budget rules to drain what remains of the National Welfare Fund. Since military spending remains untouchable, healthcare, education, and small business support will be “put under the knife.” Russia is finalizing its transition to a self-consuming economic model, sacrificing its own future to sustain continued aggression.

The Russian market is undergoing an unprecedented structural transformation. According to Rusprofile data, the number of companies with Chinese founders has surged from 1,434 in December 2021 to nearly 15,000 in February 2026. Today, every fifth company with foreign participation in Russia (22.3%) is owned by Chinese capital. This indicates not merely a partnership, but a full-scale “takeover” of niches vacated by Western brands. Trade, Construction, and Catering: Where Chinese Investment Flows The vanguard of Chinese business is concentrated in three sectors: wholesale and retail trade (over 4,200 legal entities), construction, and food services. Last year set an all-time record with 4,317 new organizations opened. Notably, Chinese entrepreneurs are not just building businesses from scratch but are also actively acquiring existing Russian assets. In 2025, for every three new registrations, there was one acquisition of an already operating company. From Partnership to Dependency: The New Reality of the Russian Market The rapid growth of Chinese participation is a direct consequence of isolation from Western technology and capital. While Russian small businesses are in “survival mode” due to taxes, Chinese players are gaining a strategic advantage. This dynamics creates long-term risks: the Russian economy is becoming extremely vulnerable to any shifts in Beijing’s trade policy, effectively transforming into a peripheral market for Chinese corporations.

The German Federal Intelligence Service (BND) has concluded that official statistics from the Russian Ministry of Finance no longer reflect the true state of public finances. While authorities report a “controlled” deficit, military expenditures are effectively being offloaded onto regional budgets and social funds, creating a concealed threat to the nation’s entire financial architecture. The Mechanics of Masking War Costs and the BND’s Findings German intelligence points to an unprecedented gap between planning and reality: instead of the reported 5.65 trillion rubles, the actual “hole” in the treasury has reached 8.01 trillion. This means the deficit exceeded initial estimates nearly sevenfold. The core issue lies in the fact that every third ruble is now spent on the war, while last year’s shortfall in oil and gas revenues was never fully compensated. The BND explicitly labels these as “embellished figures,” emphasizing that the credibility of Russian state statistics is rapidly degrading under the pressure to hide painful economic losses. Fragmentation of the Unified Budget: Regions and Social Funds as Deficit “Donors” The “creative accounting” noted by experts at the German Institute for International and Security Affairs works by shifting federal liabilities to other levels of the system. Systemic Risks and the Depletion of the Resource Base Using regions and extra-budgetary funds as a “buffer” for the deficit is a zero-sum game. The system can no longer rely solely on oil and gas rents and is shifting toward consuming its accumulated internal resources. When the limits of “creative accounting” are exhausted, the government will face a stark choice: either uncontrolled money printing (inflationary shock) or a sequestering of defense spending—which, at the moment, appears politically impossible.