The background to these problems is revealed in a confidential letter from Russian Finance Minister Anton Siluanov, which was obtained by the newspaper.
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Frozen billions and a record deficit
The leaked correspondence shows that the head of the Ministry of Finance was already running around government offices with a dramatic appeal in February.
Siluanov demanded the immediate suspension of payments for purposes unrelated to the army in order to save the military budget. The British newspaper points out that this situation exposes Russia's serious problems with financial liquidity. This is despite the fact that the Kremlin has already spent 16.84 trillion rubles (approx. PLN 865 billion) on defense and broadly understood security this year, which is almost 40 percent. the entire state budget.
Putin's plans for the entire 2026 assumed a budget deficit of 3.8 trillion rubles (over PLN 190 billion). However, the reality turned out to be ruthless. Only in the first four months of this year, Russia's budget hole swelled to 5.9 trillion rubles (approx. USD 83 billion), reaching the level of 2.5%. GDP. This the Kremlin's worst financial result since the full-scale invasion of Ukraine began in 2022.
The worst-case scenario until 2028.
The Ministry of Finance is sounding the alarm in its internal forecasts. In a worst-case scenario, additional military costs may double this year's deficit, bringing it to 4 trillion rubles. What's worse, this crisis trend is expected to continue in 2027-2028.
To prevent a total disaster, Siluanov called on the government to immediately freeze 2.9 trillion rubles (over PLN 145 billion) of this year's expenditure. The document shows that if the war lasts longer, the scale of cuts in other sectors will have to increase dramatically. This amount may reach 7.1 trillion rubles (over PLN 360 billion) in 2028. It has also been suggested that war spending may plunge the Russian budget into an even larger deficit if cuts in other areas are not achieved.
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Oil above $100 it's not enough
The Financial Times notes that since Siluanov sent the dramatic letter, Russia has received an unexpected financial drip. The outbreak of the conflict between the US and Iran has pushed oil prices to levels not seen since 2022 – the commodity exceeded the barrier of $100. per barrel.
However, analysts emphasize that even these additional dollars will not compensate for the enormous expenditure that Moscow must pour into the war effort in Ukraine every day.
