Russia’s war spending will exceed its 2026 annual budget by at least 2 trillion rubles (approximately $28 billion), according to an internal government letter. Finance Minister Anton Siluanov warned the Russian government in February 2026 that conflict costs are ravaging national finances, despite rising oil prices.
A record deficit drives the budget gap. Russia planned a 2026 deficit of 3.8 trillion rubles, but the figure reached 5.9 trillion rubles—2.5% of GDP—within the first four months of the year.
To address the shortfall, Siluanov requested that the government freeze all spending except for military expenditures. This measure seeks total cuts of 2.9 trillion rubles to offset rising war costs.
Financial strain persists despite oil price increases, which historically buffered the Kremlin’s war chest. Internal projections suggest the budget overshoot could double to 4 trillion rubles in a worst-case scenario.
Spending has increased as the Kremlin transitions to a more intensive combat phase, attempting to counter Ukrainian drone overmatch while sustaining a high cost of attrition.
The gap between official budget projections and actual spending underscores the structural fragility of Russia’s war economy.