The acceleration of oil price growth in spring 2026 did not help Russia reduce its budget gap. The deficit for the first four months of the year reached 5.9 trillion rubles ($76.6 billion), exceeding the annual target. Growth in oil and gas revenues partially eased the situation; however, higher spending and continued pressure on the revenue side prevented any change in the trend.
Deficit Exceeds Annual Target
Russia’s federal budget deficit for January–April 2026 reached 5.877 trillion rubles ($76.4 billion), or 2.5% of GDP, according to RBC citing data from the Finance Ministry. This is twice the level recorded in the same period of 2025 and already above the level planned for the entire year 2026 — ₽3.786 trillion ($49.2 billion), or 1.6% of GDP.
Thus, over the first four months, the actual gap between revenues and expenditures exceeded the annual plan by more than one third. The Finance Ministry explained the high deficit by “advance financing of expenditures” at the beginning of the year. The ministry noted that accelerated budget execution is linked to rapid contract signing and advance payment of part of the spending.
As a result, the gap between revenues and spending over the first four months has already exceeded the annual plan by more than a third. The Ministry of Finance attributed the high deficit to accelerated front-loaded spending at the beginning of the year, linked to rapid contract execution and advance payments on certain expenditures.
Oil and Gas Revenues in Russia Declined Sharply
Federal budget revenues for January–April amounted to 11.7 trillion rubles ($152.0 billion), down 4.5% compared to the previous year. The main pressure came from oil and gas revenues, which fell by 38.3% to 2.3 trillion rubles ($29.9 billion).
They were below the baseline level of ₽2.8 trillion ($36.4 billion), calculated based on a Urals oil price of $59 per barrel. The Finance Ministry attributed the decline to lower oil prices in earlier periods.
Non-oil and gas revenues, on the contrary, continued to grow. Over four months they increased by 10.2% to 9.423 trillion rubles ($122.4 billion). VAT revenues rose by 20.2% to 5.3 trillion rubles ($68.8 billion), while turnover taxes increased by 17.2%.
Russia’s Expenditures Continue to Grow
Federal budget expenditures for January–April reached 17.5 trillion rubles ($227.3 billion), up 15.7% compared with the same period last year. The Finance Ministry linked this dynamic to accelerated contracting and advance financing of certain expenditures.
The ministry does not disclose the monthly structure of budget execution. RBC estimates based on January–March data suggest that in April alone the deficit may have reached about 1.3 trillion rubles ($16.9 billion): revenues were estimated at 3.4 trillion ($44.2 billion), while expenditures reached 4.7 trillion ($61.0 billion).
Russia’s Economy: Lower Forecasts
The growth of global oil prices in 2026 did not accelerate Russia’s economic growth or improve macroeconomic dynamics. In the first quarter, Russia’s GDP contracted by 0.3%, marking the first decline for such a period since early 2023 and reflecting weakening economic activity.
The TsMAKP macroeconomic think tank lowered its GDP growth forecast for 2026 to 0.5–0.7%, down from a previous range of 0.9–1.3%. The change is linked to worsening external conditions as well as risks of reduced hydrocarbon production and exports. The government’s official forecast remains at 1.3%, although it may be revised.
Unstable Effect of Oil
Analysts note that expectations of a stronger benefit from the oil price rally following geopolitical escalation were only partially realized. Finance Minister Anton Siluanov said that additional oil revenues to the budget, generated by higher oil prices, amounted to about 200 billion rubles ($2.6 billion). This amount offset shortfalls from the previous two months.
Experts, however, note that such inflows are temporary and do not compensate for the decline in physical export volumes. As a result, higher oil prices partially ease budget pressure but do not produce a sustainable improvement in financial indicators.
TsMAKP revised its forecast for Russian oil and petroleum product exports for 2026–2029 downward. A decline is expected this year compared to 2025, indicating a continued downward trend.
Causes of the Budget Deficit Growth
Advance financing became one of the factors behind the rising deficit. A significant share of obligations was paid in advance at the beginning of the year, shifting the main burden to the first months and widening the gap between revenues and expenditures. This was also driven by a 15.7% increase in spending, which outpaced revenue growth. The ability to smooth this gap through current revenues is already diminishing at an early stage of the year.
The decline in oil and gas revenues is linked to deteriorating global oil market conditions in earlier periods. Current price increases do not offset earlier losses due to a time lag in revenue formation. As a result, this segment does not provide stable budget support.
Shipments are declining due to sanctions restrictions and logistical disruptions, as well as attacks on oil infrastructure, including ports and processing facilities. Rising global prices do not translate into a proportional increase in export revenues. Non-oil and gas revenues continue to grow, but their dynamics do not offset the decline in the hydrocarbon component and accelerating expenditures.
Conclusion
Analysts at International Investment note that Russia’s public finances are being shaped by diverging trends, with rising obligations outpacing incoming revenues. This is shifting fiscal stability toward a more strained execution model and increasing pressure on resource allocation systems.
External commodity market conditions have not provided support, as price spikes have not translated into comparable improvements in revenues. At the same time, economic activity remains subdued, with no signs of acceleration, limiting the expansion of the tax base. Growth forecasts are gradually being revised toward more moderate levels, reflecting the accumulation of structural constraints. Together, these factors form a trajectory in which the fiscal imbalance is becoming a persistent feature of the near-term outlook.