Russian citizens have been warned to prepare for a new price increase, which could be caused by the growing budget deficit. The grim forecasts were made by economic experts, after they analyzed the data made public by the Ministry of Economy in Moscow.
According to the new estimate from the Ministry of Economic Development of Russia, Russia’s GDP will only increase by 0.4% this year. The figure is three times smaller than the previous forecast (1.3%), and also 2.5 times smaller than last year’s economic growth (1%).
At the same time, forecasts for nominal GDP, the dollar exchange rate, and oil production volumes have been reduced and will be, in 2026, the lowest in the last 17 years.
The maximum level of federal budget expenditures for next year should be approximately 43.1 trillion rubles. This figure is 3 trillion rubles less than the budget plan for 2027 and 1 trillion rubles less than this year.
“A stronger ruble and a weaker economy will lead to lower tax collection, which raises an interesting question: where will the money come from? The prospects of an increasing budget deficit this year and additional tax increases next year, most likely for businesses, are becoming increasingly clear,” believes expert Evgheny Kogan.
Reducing expenses while the geopolitical situation remains unchanged is an unlikely scenario, according to an analysis published by The Moscow Times. Therefore, authorities need to find sources of revenue, and officials are already discussing the “excess profit tax”. Most likely, it will be paid by companies engaged in gold mining and metallurgy.
However, any additional measures to mobilize revenues, including through harsher taxation, will only increase the risks for the economy, warn experts, noting that the profit of private companies could decrease in 2026.
Last year, in order to supplement the military budget, which consumes almost 40% of all federal funds, the Ministry of Finance increased the corporate tax, introduced a differentiated income tax grid for individuals, and planned to raise over 3 trillion rubles in additional funds. However, the budget deficit for 2025 was five times larger than initially planned, forcing a new tax increase. The VAT was raised to 22% starting from 2026, and a tax reform for small businesses was launched. Despite this, by the end of April, the “hole” in the federal treasury had reached almost 6 trillion rubles.
