Russia’s federal budget for January–March 2026 was closed with a deficit of 4.576 trillion rubles, according to a preliminary report by the Ministry of Finance. With total revenues at 8.309 trillion rubles, the government spent 1.5 times more—reaching 12.885 trillion rubles. As a result, the “hole” in the treasury increased by 133% compared to the same period last year, exceeding the planned deficit for the entire year by 700 billion rubles.
Key Budgetary Indicators:
- Oil & Gas Slump: Revenues from the energy sector plummeted by 45% to 1.445 trillion rubles, the lowest level since the pandemic. This decline is due to the tax “lag,” as the recent price surge has not yet hit the treasury.
- Non-Resource Stagnation: Despite tax hikes, revenues from non-commodity sectors grew by only 7.1%, which, adjusted for inflation, indicates a stagnation in real economic activity.
- Expenditure Surge: The massive spending spree is attributed to increased military procurement and preparations for new offensives, fueled by expectations of future oil windfalls.
Analytical Summary:
The Q1 budget data reveals a strategy of “fiscal extremism,” where the Kremlin is spending money as if there were no tomorrow, betting everything on the Middle Eastern oil rally.
The “April Miracle” Bet: Russia’s financial strategy is currently banking on April. Due to the specifics of the tax system, the impact of $116 Urals prices will only be felt in the second quarter. The projected 1 trillion rubles in oil revenues for April is the “lifeline” the Ministry of Finance is clinging to in order to prevent uncontrolled devaluation.
War Appetite vs. Fiscal Reality: The massive deficit is the price of the military-industrial complex’s “overheating.” According to Bloomberg, instead of patching the existing budget hole, the government plans to use the upcoming oil money to further increase war spending. This conscious decision to fuel inflation prioritizes short-term military advantage over long-term economic stability.
The Alexashenko Trap: As economist Sergey Alexashenko notes, this cash gap is critical. If the blockade in the Strait of Hormuz is lifted before the “oil gold” fully saturates the budget, the government will face a grim choice: drastic spending cuts or turning on the printing press, which would decimate the civilian economy.