Russia may cut 2026 budget spending as revenues fall, Reuters reports
Photo: Vladimir Putin, Russian President (Getty Images)
Russian authorities may cut "non-sensitive" budget spending by 10%. The reason is a sharp drop in revenue from oil and gas sales, Reuters informs.
What they plan to cut
According to the outlet’s sources, Russia’s Ministry of Finance has already informed government agencies about the need to "optimize" spending.
The cuts are expected to affect projects that are not critical for the regime’s survival. These include some new initiatives, particularly road repair projects.
At the same time, Reuters sources emphasized that military spending and social obligations (salaries for public sector workers and pensions) will remain untouched due to their political sensitivity for the Kremlin.
Economic dead end
The situation in the Russian economy is rapidly deteriorating. In the first two months of 2026:
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Energy revenues fell by half;
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Total budget revenues dropped by 11%;
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The price of Russian oil declined sharply.
This has forced the government to actively use funds from the National Wealth Fund (NWF) to cover gaps in the treasury. Russia’s Central Bank has already welcomed the idea of spending optimization, seeking to curb inflation and maintain financial stability.
Iran factor and oil hopes
The only factor that could delay the cuts is the war between the United States and Israel against Iran. The closure of the Strait of Hormuz pushed global oil prices higher, which temporarily worked in Moscow’s favor.
However, a source told the outlet that this increase is unlikely to be sustainable, and the systemic problems of the budget require spending cuts regardless of the situation in the Middle East.
Crisis in Russia
Earlier, Ukraine’s Foreign Intelligence Service reported that the Russian economy has entered its deepest crisis in the past 20 years, which analysts compare to the late Soviet Union scenario.
According to intelligence data, industrial growth in Russia effectively stalled in 2025 (dropping from 4–6% to 0.8%), while rail freight traffic fell to its lowest level in 16 years.
The situation is worsened by a record budget deficit, which has reached 5.65 trillion rubles.
