The Ministry of Finance and the Central Bank warned Putin that military spending could lead to an economic collapse — Bloomberg
Officials from the Ministry of Finance and the Central Bank of the Russian Federation have warned Putin that the current level of military spending is leading to a dangerous rise in the budget deficit and poses risks to the country's economy.
This was reported by Bloomberg.
According to the agency, representatives of the financial sector proposed cutting defense spending, but Putin instructed them to seek savings in other areas of the budget without touching military spending.
At the same time, the Russian Ministry of Defense not only opposes cuts but also demands additional funding. According to Bloomberg sources, the ministry’s deficit in 2026 could reach three trillion rubles.
The agency notes that the Russian Federation’s 2026 budget was formulated with the expectation of a possible easing of hostilities and a reduction in military spending in the second half of the year. However, these expectations did not materialize.
According to Bloomberg, even rising oil prices due to the escalation of the situation in the Middle East are not enough to significantly improve Russia’s financial situation. To have a tangible effect, the price of oil would need to remain above $100 per barrel for an extended period.
In the first four months of 2026, the Russian Federation’s federal budget deficit reached 5.9 trillion rubles, which amounts to about 2.5% of GDP and already exceeds half of the annual target. Additionally, the National Welfare Fund has shrunk by 60% compared to pre-war levels.
The Russian Ministry of Economic Development has also lowered its GDP growth forecast for 2026 to 0.4%, down from the previously expected 1.3%.
