Russia’s Economy Under Strain: Half the Budget Spent on War, Annual Deficit Target Nearly Reached.

Russia’s Wartime Economic Landscape

According to TSN.ua: Expert Volodymyr Kudrytskyi provides an assessment of Russia’s economic situation amid the ongoing war, highlighting a massive budget shortfall and soaring military expenditures. According to his estimates, roughly half of Russia’s total budget is being funneled into combat operations. The country’s 2026 budget stands at around 42 trillion rubles, with a planned deficit of 4 trillion rubles.

Kudrytskyi points out that during January and February 2023, Russia’s budget deficit had already hit 3.5 trillion rubles.

“In January and February of this year, their budget deficit reached 3.5 trillion rubles,” says Volodymyr Kudrytskyi.

Spending and Funding Sources

The expert further notes that out of the 42 trillion rubles Russia spends overall, 20 trillion rubles go directly to combat operations.

“Russia’s budget is roughly 42 trillion rubles. It was drafted for this year with a deficit of about 4 trillion,” Kudrytskyi explains.

Kudrytskyi also observes that Russia relies heavily on oil sales, exporting 140 to 145 million barrels each month. A $10 increase in the price of Russian crude could generate an additional 150 billion rubles per month. However, given the current economic climate, the country may be forced to “print money.”

“The Russians will have to print money,” states Volodymyr Kudrytskyi.

In closing, Kudrytskyi underscores Russia’s limited economic resources but also notes that the country benefits from support within the Western world. “We lack our own economic resources, but the economic rear of the Western world is behind us,” he concludes.

Facing a protracted war and immense military costs, Russia is confronting severe economic challenges that could destabilize its financial system. The budget deficit and the exhaustion of the National Welfare Fund highlight the urgent need for reforms and alternative funding sources. At the same time, the country’s dependence on oil exports presents both an opportunity and a risk, depending on global energy prices.