War pressure in Ukraine is cutting for Russian President Vladimir Putin and his policy makers in Kremlin, in which Moscow is planning to increase tax and cuts cuts to deal with its rising budget deficit.
The draft budget for 2026 is expected to be taken to Parliament on 29 September. That point is only likely to have a slight change, Putin has been detected by then the main details have been detected.
On Wednesday (25 September), the government announced a plan to increase the value -added tax by 20% in a bid to curb the deficit, renovating a pledge on Putin which was not earlier not to increase the taxes by 2030.
It is expecting that some social expenses, including some social expenses, will be cut off to deal with mountain pressure by dropping the revenue of oil on a large scale, large scale, on a large scale.
Russia’s budget deficit has become around 4.2 trillion rubles ($ 50 billion, € 42.7 billion). This is about 1.9% of the country’s GDP (GDP) – about four times the original target of 0.5% for 2025. The Finance Ministry hopes that the deficit is expected to reach 5.7 trillion rubles by the end of the year.
However, Elina Ribkova, an expert at the Russian economy with Kiev School of Economics, has expected Moscow expect what she is, she has cut a pattern of high military expenses by cutting elsewhere.
“Shankudhari is the same as we have seen since 2014,” she told DW. “That is: Everything else is cut, military expenses expand. Sun, education, health care, social expenses, environmental protection, all of this is all severely cut.”
Moscow-based financial analyst Chris Veeper, with firm Macro-Advisory, told DW that the budget cut off-in Putin has indicated him last December.
He said, “We have a deliberate recession in government spending in any essential field, meaning that no one has non -senses military and perhaps non -social sector,” he said.
Shine red
Russia’s economy has been red glowing for some time, a fact that put US President Donald Trump in his social media post on 24 September, expressing strong support for Ukraine.
“Putin and Russia are in great financial trouble and it is Ukraine’s time to act,” they have written on the truth social.
So he mentioned Russia’s ongoing fuel crisis. Successful drone attacks of Ukraine on the discovery of Russian energy infrastructure in the form of refineries and export terminals have lacked many fuel grades, rising prices and long queues.
One of the major causes of overall economic difficulty is the ongoing decline in oil and gas revenue. Oil prices in China and India and enthusiastic new buyers meant that Russian energy revenue increased in 2022 and in 2023 despite Western sanctions and European Union, and the European Union reduced its dependence.
However, the price of one oil, a strong ruble, attacks on refiners and the continuous impact of restrictions have removed everyone at the major revenue source of the Kremlin. The state’s oil and gas revenue has been set to fall about 23% year-on-year in September, indicating a dark economic approach.
In July, GDP increased by year-on-year 0.4%, indicating a significant cooling. Official forecasts predict an increase of 1% this year, well by 2.5% forecast. Last year this time, inflation pointed to overheating the economy, pumping out the increase of budget on a large scale on defense spending.
Since 2021, defense spending is more than quadruple and a total of 16 trillion rubles in the year by June 2025.
Chris Veeper says the official story is that whatever is happening is a “managed cooling”, the Central Bank has raised interest rates to curb inflation and reduce consumer expenses – a step that works on a large scale.
Budget deduction
However, he says the budget is “unstable high” and if it is not pulled back over the next few years – including military expenses – this “threatens to destroy the story how stable Russia is and how the economy and people are unaffected and everything is gorgeous.”
“You will destroy the economy,” Veeper said, who believe that Putin and Kremlin are open to the idea of a peace deal due to increasing economic pressure.
“Domestic budget pressure is an important factor relative to the need to maintain stability and one that adds the weight of feeling that it gets to end the Sonar later,” Heer said.
Ribkova is not as optimistic. “When they were in the 2022 invasion, they were conscious of economic costs. They calculated them, and at the political level, they decided that it was acceptable,” he said.
Secondary restriction
Given the strains that occur in front of the Russian economy, the pressure on the European Union and the US is increasing to significantly strengthen the existing restrictions in search of a successful peace talks.
Trump has recently asked Europe to more to complete its purchase of Russian gas, mostly through liquefied natural gas (LNG). The block still purchases Russian oil through refined products.
The US has placed secondary sanctions on the country India and China, which buy large amounts of Russian oil. The search one step can seriously add to the economic challenges of Moscow.
Ribkova feels that now is the time to increase pressure with more restrictions on Moscow as it is clear that the economy is as weak as it has been for a long time.
However, she indicates the fact that Venezuela, North Korea and Iran remain in power despite the economic disaster because the evidence alone will not save Ukraine.
“The restrictions can fix the part of the problems, but they cannot solve everyone,” Ribkova said.
However, Chris Veeper feels that especially secondary restrictions can force Moscow to the table quickly.
If the US was imposed secondary restrictions on Russian oil buyers, it would be very important, their argument.
“If you were to hits another 20 or 30% for oil export revenue, it was to say, which would get the budget in a unstable area and force domestics to a massive change in domestics.”
Edited by: Uwe Hessler