Russia imposes austerity, cuts non-military spending 35% while war costs rise

AI digestMimile.ai EditorialAugust 28, 2026 at 09:40 AM

This digest was compiled by AI from multiple sources — links to the originals are below.

Russia imposes austerity, cuts non-military spending 35% while war costs rise

Russia has imposed austerity measures, cutting most federal spending by 35% since April, as the budget deficit widened sharply. Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that funds may be insufficient for timely payments. Military spending, public-sector wages, and social programs were exempted from the cuts.

Key Facts

Russia cut most federal spending by 35% since April under austerity measures, according to Bloomberg.
The budget deficit reached 8.654 trillion rubles as of August 24, according to Russia's Electronic Budget system.
Military spending, public-sector wages, social programs, regional support, and debt servicing were exempted from the cuts.
The Ministry of Finance planned to reduce the 2026 deficit to 3.7 trillion rubles from 5.7 trillion in 2025.
Bloomberg sources estimate the year-end deficit could reach about 9 trillion rubles, or 3.2–3.8% of GDP.

Austerity Measures

Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that budget funds might be insufficient for timely payments. The government ordered federal agencies to postpone non-essential spending and prepare for a 15% staff reduction. Defense spending, public-sector wages, social programs, regional support, and debt servicing were excluded from the cuts.

Budget Deficit

The Ministry of Finance planned to reduce the 2026 deficit to 3.7 trillion rubles from 5.7 trillion in 2025. The first-quarter deficit reached 4.5 trillion rubles, exceeding the full-year plan. By the end of the second quarter, the deficit hit 5.7 trillion rubles, and by early August it reached 6.5 trillion rubles, about 2.8% of GDP. As of August 24, the deficit stood at 8.654 trillion rubles, according to the Electronic Budget system.

Outlook

Bloomberg sources estimate the year-end deficit could reach about 9 trillion rubles, or 3.2–3.8% of GDP. This would exceed the Bank of Russia's most pessimistic forecast of 8.2 trillion rubles. Sources told Bloomberg the situation is not yet considered critical, and Russian authorities expect to continue financing the war in Ukraine for several more years.

1 source

Russia imposes austerity, cuts non-military spending 35% while war costs rise

exclusive.kz

Exclusive.kz

Finance

Bloomberg reports Russia neared cash depletion in April as war costs mounted

Russia's war spending pushed the federal treasury to the brink of running out of cash in April, Bloomberg reported, citing people familiar with the matter. Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that the government would not have enough money to make all scheduled payments on time. The treasury's single account fell to roughly minus 5.5 trillion rubles, or about $65.3 billion in the red, forcing austerity measures.

Finance

Russia cuts non-war spending 35% as budget deficit hits 2.8% of GDP

Russian Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that federal budget funds may be insufficient for timely payments. The federal budget balance on the treasury account fell to a negative 5.5 trillion rubles ($65.3 billion). Officials then introduced austerity measures, cutting non-war spending by 35%.

Politics

Kazakhstan bans state bodies from seeking extra budget funds outside planning

Kazakhstan has banned state bodies, akimats and other budget recipients from requesting additional republican budget spending outside the established planning process. The changes to the government regulations have already entered into force. Proposals for the next planning period must be submitted by June 20 of the year the budget is formed.

Politics

EU to present largest Russia sanctions package since 2022 this autumn

EU foreign policy chief Kaja Kallas said the bloc will present its largest Russia sanctions package since 2022 this autumn. If adopted, the list of sanctioned Russian individuals, companies and organizations would rise by a third, she told Die Welt in an interview published Aug. 17.

Russia imposes austerity, cuts non-military spending 35% while war costs rise

Key Facts

Austerity Measures

Budget Deficit

Outlook

Read more

Read more