The Russian government is forced to raise taxes and cut spending on social sectors to cover the costs of the war in Ukraine. The war, ongoing for more than three years, is putting great pressure on the budget.
Oil and gas revenues are declining due to Western sanctions. At the same time, government spending has sharply increased, and in 2025 alone, 17 trillion rubles($212 billion) are planned to be spent on defense and security. This accounts for nearly half of all expenditures.
According to parliament data, by 2028 it may be necessary to cut 2 trillion rubles($24.9 billion) annually in non-military sectors. This will affect education, healthcare, and other services.
The Ministry of Finance is forced to raise taxes to fill the budget gap. Experts estimate that in 2025 the deficit may reach 5–8 trillion rubles($62–100 billion).
Economists believe that Russia is entering a period of prolonged weak growth. At the same time, the Kremlin will not abandon military spending, which means cuts in programs for the population and higher taxes.
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