Citing unnamed officials and economists, the report suggests that the Russo–Ukrainian war is increasing the fiscal pressure on the Russian government. The budget shortfall grew to RUB4.9 trillion ($61 billion) this year, driven by soaring defense outlays and falling oil and gas revenues.
Russia’s central bank has raised interest rates to a 20-year high, and the total cost of defense and national security in 2025 is set at RUB17 trillion ($211 billion)—41% of total federal spending and the largest peacetime share since the Cold War. The draft 2025 budget, to be presented in September, allocates defense and security expenditures at about 8% of GDP, though a government source said the figure may be slightly higher.
Anatoly Artamonov, head of the Federation Council’s budget committee, said in late July that “it is urgently necessary to consolidate the budget” in light of gloomy economic forecasts and declining oil and gas revenues. Since the full-scale invasion of Ukraine in February 2022, Russia’s nominal budget spending has nearly doubled, fueling inflation and corporate borrowing costs.
Officials and analysts expect the 2025 deficit to reach roughly RUB5 trillion ($6.2 billion, or 2.5% of GDP), though some estimates put it as high as RUB8 trillion ($99 billion) if real spending is not cut nearly 20% for the second half of the year. A senior Russian finance ministry source told Reuters that the central bank is reluctant to lower its key rate while the deficit is this substantial.
Energy revenues continue to slide. The Moscow Times reported on Aug. 5 that federal receipts from oil and gas fell 27% to RUB787.3 billion ($9.8 billion) in July 2025 compared with a year earlier. Over the first seven months of 2025, those revenues dropped 18.5% to RUB5.52 trillion. Ukraine’s Foreign Intelligence Service said Aug. 7 that oil and gas income has fallen 19% in dollar terms to $69.2 billion in January–July 2025 versus the same period in 2024.
Analysts warn that high interest rates and the ongoing war will weigh on Russia’s growth for years.