cross-posted from: mander.xyz/post/48744270
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As the conflict in Ukraine continues, Russia is experiencing a decline in budget revenues from energy sales and an economic slowdown, which is reducing tax income from other sectors.
To address this, the government plans to channel more money into the budget reserve fund to protect it from depletion. As a result, spending cuts may be necessary. Sources indicate that the Finance Ministry has informed agencies about the need for budget reductions, prompting discussions about what to cut.
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While ordinary Russians are facing rising inflation, the impacts of the economic slowdown, fueled by high interest rates, are not yet fully felt, and government spending cuts have not led to widespread layoffs. The situation is exacerbated by Western sanctions affecting Russia’s energy sales. In early 2026, budget energy revenues halved, leading to an overall revenue decline of 11%.
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Sources caution that the rise in oil prices [following the US and Israeli attacks on Iran] may not last and cuts are necessary regardless of short-term fluctuations.
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