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Russia Faces 2026 Budget Squeeze as Oil Income Sags, Deficit Seen Near 4%

Deep discounts and a stronger rouble have cut energy income and are pressuring Russia's public finances.

Overview

  • Official data show January energy revenues fell to 393.3 billion roubles, the lowest since July 2020 and roughly half the prior month’s level.
  • A government‑linked think tank’s unpublished estimates, cited by a source, project 2026 energy receipts 18% below plan and a deficit of 3.5%–4.4% of GDP versus a 1.6% target.
  • Analysts say the state’s 4.1 trillion rouble fiscal reserves could be largely depleted within a year at the current pace, with Alfa and VTB estimating heavy drawdowns.
  • Sanctions, steeper discounts on Russian crude and last year’s rouble surge have reduced tax take, and the think‑tank scenario assumes a 30% drop in Indian oil purchases as calculations were made before President Trump said he persuaded India to stop buying.
  • Moscow has lifted the VAT rate to 22% and added levies on electronics, prompting broad price increases and small protests as growth forecasts for 2026 hover near 0.8%.