Russia’s Regions Post Largest-Ever Budget Deficit in 2025 - The Moscow Times
Moscow Times
February 26, 2026
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Russia's regions experienced a record-breaking budget deficit in 2025, reaching 1.48 trillion rubles ($19.22 billion), marking a significant increase from the previous year's shortfall of 407 billion rubles ($5.28 billion). The number of regions running deficits also surged to 74, up from 50 in 2024. Spending growth outpaced revenue growth by nearly double, with total regional spending rising 9% to 24.1 trillion rubles ($312.78 billion) while revenues grew just 4% to 22.6 trillion rubles ($293.34 billion).
The surge in deficits is largely attributed to increased military spending and compensation payments for injuries and losses linked to the ongoing conflict. Moscow, despite recording a surplus between January and September 2025, faced its largest deficit at 229 billion rubles ($2.97 billion). Other resource-rich regions, such as Yamalo-Nenets Autonomous Okrug and Khanty-Mansi Autonomous Okrug, also grappled with significant deficits of 84 billion rubles ($1 billion) and 72 billion rubles ($933.5 million), respectively.
The financial strain on regions underscores broader challenges facing Russia's economy as it struggles to fund its military operations. The federal budget deficit for 2025 reached 5.64 trillion rubles, equivalent to 2.6% of GDP—five times the initial target of 0.5%. Experts warn that without increased federal transfers, regions will struggle to meet their obligations, further exacerbating economic pressures.
This situation highlights the growing financial burden on Russia's government and its citizens, with implications for global stability and international relations. As Prime Minister Mikhail Mishustin acknowledged during his annual address, closing these widening budget gaps remains a top priority for the Kremlin. The
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Originally published on Moscow Times on 2/26/2026