Russia's 2026 Budget Deficit to Hit 2%, Doubling Initial Target

Putin announced next year's budget deficit will be 2% of GDP, up from the 1.6% originally planned for this year, which is now expected to come in at double that figure. This signals fiscal strain amid sustained military spending and sanctions, potentially pressuring the ruble and adding to inflation. The widening deficit suggests increased state borrowing, which could crowd out private investment and complicate monetary policy.