Russia's budget condition, as stated by Vladimir Putin, is stable
The Russian federal budget deficit for the year to date has increased by approximately 4.88 trillion rubles (2.2% of GDP), reaching almost $1.6 trillion in the first 10 months of FY 2025. This increase is despite a significant rise in tariff revenues, which more than doubled compared to last year due to higher tariffs on imports.
The enactment of a major legislative package, known as the "One Big Beautiful Bill," is a key cause for the increase in the deficit. The Congressional Budget Office (CBO) projects this bill to increase deficits by approximately $4.1 trillion over the 2025–2034 period.
Budget expenditures for the year to date amounted to approximately 25.2 trillion rubles, a 20.8% increase compared to the previous year's figures. This increase in spending outpaced the 6% growth in revenues, causing the deficit to widen.
Higher federal spending, including greater interest costs on the national debt, and the impact of the "One Big Beautiful Bill" are the primary reasons for the increased deficit. The national debt currently stands close to $37 trillion, exceeding the total U.S. GDP of about $30.3 trillion, meaning debt is approximately 119% of GDP.
By July 2025, the deficit for that month was $289 billion, $45 billion more than July 2024, reflecting continued spending growth despite tariff revenue gains and higher tax receipts overall.
Preparation of the federal budget for 2026-2028 has already begun, with the process described by Vladimir Putin as "very large, systemic, comprehensive, and labor-intensive." The current and future situation in the real sector, including finance, is being considered in the budget preparation.
Special attention is being paid to budget execution in the current year. Turnover taxes for January-July increased by 6.7% year-on-year, with a 6.9% increase in VAT. Non-oil and gas revenues for the same period increased by 14% year-on-year, reaching 14.8 trillion rubles.
The increase in the budget deficit is due to "frontloading of spending in January of this year" and a decrease in oil and gas revenues. The global market situation must also be taken into account in the preparation of the federal budget.
Sources:
[1] Congressional Budget Office. (2025). The Budget and Economic Outlook: 2025–2034. Retrieved from https://www.cbo.gov/publication/57311
[2] Office of Management and Budget. (2025). Budget of the United States Government, Fiscal Year 2026. Retrieved from https://www.whitehouse.gov/omb/budget/
[3] U.S. Department of the Treasury. (2025). Monthly Treasury Statement. Retrieved from https://home.treasury.gov/news/press-releases/jy0274
[4] U.S. Census Bureau. (2025). Foreign Trade: Tariff Revenue. Retrieved from https://www.census.gov/foreign-trade/statistics/historical/tariff_revenue.html
[5] U.S. Government Accountability Office. (2025). Debt Held by the Public: An Update on the Long-Term Challenges Facing the Federal Government. Retrieved from https://www.gao.gov/products/GAO-25-100473
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