The warning came in a letter sent by Finance Minister Anton Siluanov to the cabinet back in February — a document that paints a sobering picture of where Russia's economy is headed if the spending trajectory doesn't change.

The Numbers Behind the Crisis
The figures are stark. Moscow had already allocated more than €200 billion toward the war effort this year, working from an assumed budget deficit of around €46 billion. But just four months into 2026, that deficit had already climbed past €70 billion — equivalent to 2.5 percent of GDP. Siluanov warned that the €24 billion shortfall could potentially double over the course of the year as additional military expenditure piles up.

To try and get ahead of the problem, the finance ministry has asked the cabinet to freeze roughly €35 billion in spending this year. If left unaddressed, that figure could balloon to as much as €85 billion by 2028. This latest freeze request followed an earlier directive in January, when government agencies were told to voluntarily cut non-essential costs by 10 percent — a measure that deliberately excluded social programs and defense budgets from any reductions.

Siluanov was direct in his assessment of the situation. "Our reserves are not endless," he said. "We can't allow any weak points in our finances while such major transformations are going on in the world. The cabinet is working constantly to stabilize and balance state finances."

An Economy Showing Its Cracks
Beyond the budget numbers, broader economic warning signs are multiplying. A temporary boost from higher oil prices — driven in part by the conflict in Iran — has not been enough to make up for weaker-than-expected energy revenues and the adverse effects of a strong ruble on export income. The combination has left Russia in a tighter fiscal position than officials had publicly anticipated.

The mood among ordinary Russians is shifting, too. One investment analyst described a growing sense of public unease, with people closely watching government finances and asking difficult questions — about interest rate cuts, future tax increases, and which sector of society might face cuts next.

After more than four years of continuous warfare, Russia's economy is showing genuine signs of exhaustion. And notably, some officials within Russia have begun to openly question whether maintaining a costly and inconclusive stalemate in Ukraine is a sustainable path forward.