Russian authorities have decided to cut 10% of the federal spending items the Finance Ministry classifies as “non-sensitive.” The stated aim is to support the economy and prevent another surge in inflation. Economists interviewed by Novaya-Europe estimate the savings at between 600 billion and 2.2 trillion rubles.
The publication’s sources say the cuts are unlikely to affect defense, security, social policy, or public debt servicing. Those items account for about 28 trillion rubles out of total planned 2026 spending of 44 trillion. That means the main pressure would fall on spending for the economy, healthcare, education, housing and utilities, and environmental protection.
Economists warn that these sectors are especially vulnerable. Healthcare spending amounts to 1.9 trillion rubles, education to 1.7 trillion, housing and utilities to 2 trillion, and ecology to 1.1 trillion. In their view, further cuts here would directly worsen living standards, while military spending remains at 13 trillion rubles.
One reason for the review is the threat of a widening budget deficit after oil-and-gas revenues fell sharply at the start of the year. Oil prices then jumped because of the war in the Persian Gulf. As of March 16, cargoes of Russian oil bound for India were selling at about $99 per barrel, and Reuters estimated that budget revenues from commodity exports could already double in March to about 600 billion rubles.
Sergey Vakulenko, a senior fellow at the Carnegie Berlin Center for Russian and Eurasian Studies, said that every additional $10 in the oil price brings Russia roughly $2.8 billion in extra monthly revenue. But the article’s sources stress that this spike may be short-lived: future price dynamics depend on the fighting in the Middle East and the situation around the Strait of Hormuz.
Economists say the spending cuts were being prepared even before the oil price jump and were based on a worst-case scenario. If the cuts prove insufficient, the government may raise taxes on businesses and selected sectors. As a final option, they point to a sharp increase in domestic borrowing through the banking system, which, as one source put it, would amount to effectively “printing money” and risking the loss of control over inflation.