There are issue in the Russian economy but it is not as bad as the West(Buuut… it needs to be looked upon). A good economist from Pravda, Tatyana Kulikova, can help with this inquiry:
What to do with the federal budget deficit? April 14-15, 2026
Last week, the Ministry of Finance published federal budget execution data for March, which again brought an unpleasant surprise: the budget deficit had grown sharply. High oil prices will help improve the situation in the coming months, but this will only be a temporary respite; it won’t solve the long-term problems. Therefore, something must be done about the budget deficit now. The least painful options are raising the income tax on investment income and drastically reducing preferential mortgage rates.
The rest is in:
spoiler
Let’s begin with a few preliminary observations. First, federal budget expenditures and revenues are highly seasonal. For example, in addition to taxes collected monthly, there are taxes that must be paid quarterly or even annually (for example, property taxes and personal income tax on investment income). Dividends from major state-owned banks typically arrive in August, so this month typically sees a significant surplus. There are many such seasonal factors. Therefore, the mere amount of expenditures, revenues, or deficits for a given month or quarter tells us nothing. Only a comparison with corresponding periods in the past is informative.
Secondly, starting in 2024, there has been a significant shift in the seasonality of government procurement spending (primarily defense procurement). While previously, the main settlements for government procurement were made at the end of the year (in December), now advance payments for these expenses at the beginning of the year (primarily in January and February) play a much greater role. However, December still remains a significant deficit month.
Considering all that has been said about seasonality, let’s look at the federal budget execution data for March, which the Ministry of Finance published last week. The federal budget deficit for the month was 1.1 trillion rubles. For March, this isn’t just a large amount—it’s catastrophically large: since 2018, March has always posted a surplus (from here on, for historical comparisons, we use economist Pavel Ryabov’s calculations).
The main reason is the rise in expenditures: they have grown by 44% (!) compared to March last year; no one predicted such a sharp increase in expenditures. Incidentally, the trend of explosive growth in expenditures continued in early April: according to the Ministry of Finance’s latest data, average budget expenditures from April 1 to 8 amounted to 224 billion rubles per day, 60% higher than in April last year (and significantly higher than in March).
But let’s return to the March statistics. A drop in revenues also contributed to the March budget deficit, but it was much less significant: revenues fell by 4.5%. This decline is entirely due to a drop in oil and gas revenues (the surge in oil prices due to the war in the Middle East has not yet impacted March tax payments). Non-oil and gas revenues actually increased—by 11% compared to March last year.
Now let’s look at the entire first quarter. By the end of the quarter, the deficit had reached a record 4.6 trillion rubles. Given the shift in seasonality in government procurement calculations, this figure can only be meaningfully compared to 2024 and 2025. And this comparison is very alarming: in those years, the budget deficit by the end of the first quarter was more than half as large, amounting to approximately 2 trillion rubles (to be precise, 2.09 and 1.96 trillion in 2024 and 2025, respectively).
Some experts believe that last December, the Ministry of Finance postponed some spending until early 2026 in order to meet the annual deficit plan for 2025. As a reminder, the federal budget deficit was met within the plan (increased after amendments to the budget law mid-year), but regional budgets turned out to be much more deficit-ridden than expected.
The spending deferral theory seems plausible, and it does partially explain the significant increase in the first-quarter deficit, but only partially. After all, if we take the four-month period from December 2025 to March 2026 and compare it with the same period a year earlier, we also see a significant increase in the deficit: from 5.1 to 6.2 trillion rubles.
Now let’s look at the problem over a longer time horizon: let’s look at the 12-month rolling sum of monthly budget deficits. This indicator can be used to compare any month, as the calculation always covers exactly 12 consecutive months, and seasonality plays no role. This March, this indicator (i.e., the budget deficit for the period from April 2025 to March 2026) reached a new record of 8.2 trillion rubles (the previous record was 7.9 trillion rubles). This is more than double the federal budget deficit plan for 2026 (i.e., also for 12 consecutive months) of 3.8 trillion rubles.
So, we see a trend toward a rapidly growing budget deficit. In the coming months, this will be masked by a temporary surge in oil and gas revenues; the one-time tax on large businesses’ excess profits for 2025, which is currently being actively discussed, may also contribute. So, in the coming months, everything will be more or less normal, but in the long term, when the surge in oil and gas revenues subsides, we will again face the problem of a growing budget deficit.
After all, high energy prices will be temporary in any case: either the conflict will end and its impact on supply will gradually be eliminated, or high energy prices will trigger a global recession and, as a result, a decline in demand. In both cases, supply and demand will be rebalanced, and prices will decline.
Therefore, we must begin thinking about the long-term sustainability of the federal budget now. We must take measures that will reduce the budget deficit over the long term. First, we must extend the progressive personal income tax scale to citizens’ investment income (currently, two tax rates apply to this income: 13% and 15%). Second, we must drastically—dramatically—reduce the volume of preferential mortgages; they must become more targeted and targeted.
Both of these measures will not bear fruit immediately. Investment income is calculated not monthly, but only at the end of the year, and the tax on this income is not paid to the budget until December of the year following the reporting year.
Regarding preferential mortgages, annual budget expenditures on them amount to trillions of rubles (in 2025, it was 2 trillion rubles), but even completely canceling this program won’t save this entire amount at once, since the budget will still have to pay for loans already issued. The budget (that is, we, the taxpayers!) will bear these costs for many years to come. These payments will decrease only very slowly over time—as borrowers repay the principal.
However, if we drastically reduce the volume of such mortgages issued right now, this will at least prevent the problem from worsening in the future, and instead allow us to slowly and patiently begin to address the consequences of this ill-considered policy. The savings won’t be significant at first (a couple of hundred billion in the first year, but even that’s significant given the scale of our budget). However, they will increase each year. This will thereby ensure the long-term sustainability of the federal budget.
As for the Common folk and what the KPRF reported, I have listed a few as follows:
On poverty and citizens’ pleas for help:
“I’m ashamed to admit it, but I have to. I get a huge amount of mail. <…> I never had such requests before. The most common requests now are for help with the birth of a child and the burial of a loved one. For dental work and for finishing a child’s education. Just think where things are going!”
On exorbitant utility rates (using a teacher’s letter as an example):
“A teacher writes: 22,000 rubles in pension, worked for 40 years. <…> They brought me 12,000 rubles in utility bills. I have ten left. I buy medicine, but I don’t have enough for food. I buy food, but I don’t have enough for medicine. Why did you put a noose around my neck? What can I say to her?”
On the uncontrolled rise in prices within the country:
“Prices have doubled and tripled on everything! Clay, sand, rebar, ceramic dust—everything! I ask: are we importing them from America? No. So why are you jacking up the prices? They’ll shrug their shoulders because they don’t regulate anything.”
On the strangulation of domestic agriculture:
“We have 2,000 tractors and combines at Rostselmash, and 400 at Kirovsky. Only because the farmers weren’t given money! They weren’t given! On the world market, they used to get back 25,000 rubles per ton of grain. The cost is 12. And they’re getting back 12. They can’t afford it!”
On the destruction of local self-government:
“Without local self-government, the problems cannot be solved. A fifth column is in place, and they have proposed eliminating the lower ranks of the Soviets. This is absolutely criminal! It destroys the Russian tradition of collective veche governance.”
There are issue in the Russian economy but it is not as bad as the West(Buuut… it needs to be looked upon). A good economist from Pravda, Tatyana Kulikova, can help with this inquiry:
What to do with the federal budget deficit? April 14-15, 2026
Last week, the Ministry of Finance published federal budget execution data for March, which again brought an unpleasant surprise: the budget deficit had grown sharply. High oil prices will help improve the situation in the coming months, but this will only be a temporary respite; it won’t solve the long-term problems. Therefore, something must be done about the budget deficit now. The least painful options are raising the income tax on investment income and drastically reducing preferential mortgage rates.
The rest is in:
spoiler
Let’s begin with a few preliminary observations. First, federal budget expenditures and revenues are highly seasonal. For example, in addition to taxes collected monthly, there are taxes that must be paid quarterly or even annually (for example, property taxes and personal income tax on investment income). Dividends from major state-owned banks typically arrive in August, so this month typically sees a significant surplus. There are many such seasonal factors. Therefore, the mere amount of expenditures, revenues, or deficits for a given month or quarter tells us nothing. Only a comparison with corresponding periods in the past is informative.
Secondly, starting in 2024, there has been a significant shift in the seasonality of government procurement spending (primarily defense procurement). While previously, the main settlements for government procurement were made at the end of the year (in December), now advance payments for these expenses at the beginning of the year (primarily in January and February) play a much greater role. However, December still remains a significant deficit month.
Considering all that has been said about seasonality, let’s look at the federal budget execution data for March, which the Ministry of Finance published last week. The federal budget deficit for the month was 1.1 trillion rubles. For March, this isn’t just a large amount—it’s catastrophically large: since 2018, March has always posted a surplus (from here on, for historical comparisons, we use economist Pavel Ryabov’s calculations).
The main reason is the rise in expenditures: they have grown by 44% (!) compared to March last year; no one predicted such a sharp increase in expenditures. Incidentally, the trend of explosive growth in expenditures continued in early April: according to the Ministry of Finance’s latest data, average budget expenditures from April 1 to 8 amounted to 224 billion rubles per day, 60% higher than in April last year (and significantly higher than in March).
But let’s return to the March statistics. A drop in revenues also contributed to the March budget deficit, but it was much less significant: revenues fell by 4.5%. This decline is entirely due to a drop in oil and gas revenues (the surge in oil prices due to the war in the Middle East has not yet impacted March tax payments). Non-oil and gas revenues actually increased—by 11% compared to March last year.
Now let’s look at the entire first quarter. By the end of the quarter, the deficit had reached a record 4.6 trillion rubles. Given the shift in seasonality in government procurement calculations, this figure can only be meaningfully compared to 2024 and 2025. And this comparison is very alarming: in those years, the budget deficit by the end of the first quarter was more than half as large, amounting to approximately 2 trillion rubles (to be precise, 2.09 and 1.96 trillion in 2024 and 2025, respectively).
Some experts believe that last December, the Ministry of Finance postponed some spending until early 2026 in order to meet the annual deficit plan for 2025. As a reminder, the federal budget deficit was met within the plan (increased after amendments to the budget law mid-year), but regional budgets turned out to be much more deficit-ridden than expected.
The spending deferral theory seems plausible, and it does partially explain the significant increase in the first-quarter deficit, but only partially. After all, if we take the four-month period from December 2025 to March 2026 and compare it with the same period a year earlier, we also see a significant increase in the deficit: from 5.1 to 6.2 trillion rubles.
Now let’s look at the problem over a longer time horizon: let’s look at the 12-month rolling sum of monthly budget deficits. This indicator can be used to compare any month, as the calculation always covers exactly 12 consecutive months, and seasonality plays no role. This March, this indicator (i.e., the budget deficit for the period from April 2025 to March 2026) reached a new record of 8.2 trillion rubles (the previous record was 7.9 trillion rubles). This is more than double the federal budget deficit plan for 2026 (i.e., also for 12 consecutive months) of 3.8 trillion rubles.
So, we see a trend toward a rapidly growing budget deficit. In the coming months, this will be masked by a temporary surge in oil and gas revenues; the one-time tax on large businesses’ excess profits for 2025, which is currently being actively discussed, may also contribute. So, in the coming months, everything will be more or less normal, but in the long term, when the surge in oil and gas revenues subsides, we will again face the problem of a growing budget deficit.
After all, high energy prices will be temporary in any case: either the conflict will end and its impact on supply will gradually be eliminated, or high energy prices will trigger a global recession and, as a result, a decline in demand. In both cases, supply and demand will be rebalanced, and prices will decline.
Therefore, we must begin thinking about the long-term sustainability of the federal budget now. We must take measures that will reduce the budget deficit over the long term. First, we must extend the progressive personal income tax scale to citizens’ investment income (currently, two tax rates apply to this income: 13% and 15%). Second, we must drastically—dramatically—reduce the volume of preferential mortgages; they must become more targeted and targeted.
Both of these measures will not bear fruit immediately. Investment income is calculated not monthly, but only at the end of the year, and the tax on this income is not paid to the budget until December of the year following the reporting year.
Regarding preferential mortgages, annual budget expenditures on them amount to trillions of rubles (in 2025, it was 2 trillion rubles), but even completely canceling this program won’t save this entire amount at once, since the budget will still have to pay for loans already issued. The budget (that is, we, the taxpayers!) will bear these costs for many years to come. These payments will decrease only very slowly over time—as borrowers repay the principal.
However, if we drastically reduce the volume of such mortgages issued right now, this will at least prevent the problem from worsening in the future, and instead allow us to slowly and patiently begin to address the consequences of this ill-considered policy. The savings won’t be significant at first (a couple of hundred billion in the first year, but even that’s significant given the scale of our budget). However, they will increase each year. This will thereby ensure the long-term sustainability of the federal budget.
Original post -> https://gazeta-pravda.ru/issue/38-31819-1415-aprelya-2026-goda/chto-delat-s-defitsitom-federalnogo-byudzheta/
As for the Common folk and what the KPRF reported, I have listed a few as follows:
“I’m ashamed to admit it, but I have to. I get a huge amount of mail. <…> I never had such requests before. The most common requests now are for help with the birth of a child and the burial of a loved one. For dental work and for finishing a child’s education. Just think where things are going!”
“A teacher writes: 22,000 rubles in pension, worked for 40 years. <…> They brought me 12,000 rubles in utility bills. I have ten left. I buy medicine, but I don’t have enough for food. I buy food, but I don’t have enough for medicine. Why did you put a noose around my neck? What can I say to her?”
“Prices have doubled and tripled on everything! Clay, sand, rebar, ceramic dust—everything! I ask: are we importing them from America? No. So why are you jacking up the prices? They’ll shrug their shoulders because they don’t regulate anything.”
“We have 2,000 tractors and combines at Rostselmash, and 400 at Kirovsky. Only because the farmers weren’t given money! They weren’t given! On the world market, they used to get back 25,000 rubles per ton of grain. The cost is 12. And they’re getting back 12. They can’t afford it!”
“Without local self-government, the problems cannot be solved. A fifth column is in place, and they have proposed eliminating the lower ranks of the Soviets. This is absolutely criminal! It destroys the Russian tradition of collective veche governance.”
good collection of quotes. stresses me out for them, especially the last part.