Russia’s budget deficit reached 2.5% of GDP since the start of the year. Kremlin says that’s no cause for concern.

Russia’s federal budget deficit reached 5.8 trillion rubles, or 2.5% of GDP, over the first eight months of 2026, according to a preliminary estimate from the Finance Ministry, one and a half times more than in the same period last year. Authorities had projected a full-year deficit of just 3.8 trillion rubles, or 1.6% of GDP.

Spending is outpacing revenue this year. The government spent 31.7 trillion rubles in the first eight months, up 14.7% from a year earlier, while revenue grew just 9.2%, to 25.9 trillion rubles. Oil and gas revenue fell 16.7%, to five trillion rubles, though non-oil-and-gas revenue rose 18.1%, to 20.9 trillion rubles, offsetting much of that decline.

The Finance Ministry attributed the rapid growth in spending to advance payments the government made on state contracts at the start of the year.

The Kremlin does not consider the growing deficit “an indicator that should cause any serious concern.” The budget deficit is “a moving figure,” presidential spokesperson Dmitry Peskov said, adding that the macroeconomic stability of the Russian economy is “absolutely assured.”

Authorities have not ruled out that the widening deficit will require additional financing for the budget, and the Finance Ministry plans to borrow only 5.5 trillion rubles on the domestic market for all of 2026.

Domestic borrowing grew too costly in June and July, when the Finance Ministry canceled three auctions for federal loan bonds after yields climbed above 16% annually. The ministry attributed the cancellations to market volatility, but experts said the real reason is that the Finance Ministry isn’t willing to borrow at such high rates. Besides issuing government debt, the ministry stated, authorities could cover the deficit by drawing on budget reserves and selling assets.