Kremlin faces tough 2026 budget decisions as war spending mounts

The Kremlin will be forced to make difficult choices in drafting Russia’s 2026 budget amid growing pressure on its war-driven economy, the Financial Times reported.

According to the finance ministry, energy revenues fell 20% year-on-year in January–August. The federal deficit reached 4.9 trillion rubles ($61 billion) in the first half of 2025 — about 2.2% of GDP, compared with the planned 0.5%.

FT said GDP growth will slow to 1.4% this year and remain below 2% in the next three years. Analysts noted the government may cut non-military spending while military outlays have nearly doubled since 2022.