The kremlin’s Budget Is in the Red: Moving Toward State Bankruptcy

According to the Foreign Intelligence Service of Ukraine, the deepening economic crisis in the rf  is the result of an exorbitant increase in federal budget expenditures. In April, russia’s public spending increased by 35 % compared to March and amounted to USD 51.4 billion. In total, in the first four months of 2025, the expenditure side of the russian budget increased by 21 % compared to the same period last year and amounted to USD 185.8 billion.

In the coming days, the kremlin is going  to triple the budget deficit – from 1.2 to 3.8 trillion rubles, which at the current exchange rate corresponds to USD 45.6 billion. This is a new anti-record for the putin regime since the beginning of the armed aggression against Ukraine, as the rf’s budget was in surplus before the war.

The  Foreign Intelligence Service of Ukraine  forecasts  that in 2025 the increase in the federal budget deficit of the rf will go beyond the parameters specified by the ministry of finance of russia on May 12. In January-April, the deficit reached a record high of USD 39 billion and was three times higher than last year (for the same period).

In order to patch up the financial gaps, the russian government is forced to continue spending money from the national welfare fund instead of replenishing it. Thus, in the first quarter of this year alone, USD 6.5 billion were spent from this fund, while the ministry of finance of the rf planned to spend USD 5.4 billion for the whole of 2025.

This is evidence that russia’s  economy is entering a systemic crisis, and it is becoming increasingly difficult for the kremlin to hide its strategic miscalculations related to the rf’s armed aggression against Ukraine.

 

Surplus (+) / Deficit (-) of the rf’s Federal Budget, trln rubles