Russia’s regional budgets ended 2025 with a combined deficit of 1.538 trillion rubles — the highest since records began — surpassing 1.5 trillion rubles ($19.9 billion), according to the report published by the Russian Finance Ministry.
The gap was unprecedented: five times larger than in 2024 and nearly eight times bigger than in 2023. Even during the pandemic downturn, the numbers were far lower: in 2020, regional budgets posted a combined shortfall of 677 billion rubles ($8.80 billion ).
This result more than doubled the previous negative record and points to systemic strains in Russia’s regional finances.
A sharp drop in profit tax receipts was the main driver. Collections fell 8.5% to 5.278 trillion rubles. Overall regional revenues rose just 4.8% to 25.87 trillion rubles, while spending jumped 10% to 27.408 trillion rubles — widening the gap.
“The picture is rather bleak,” economist Natalia Zubarevich told Russian outlet 72.ru.
The worst strains emerged in Kemerovo and Vologda regions, where the deficit reached 25% of own-source revenues. Significant problems were also recorded in Arkhangelsk, Murmansk and Tyumen regions at 20–22%, and in Irkutsk region and the Komi Republic at 17–18%.
Strikingly, the widening deficits came amid a heavier tax burden. Tax hikes should have supported the revenue base, but didn’t in practice — a sign of deeper imbalances in Russia’s economy.
Instead of shoring up the economy, the Kremlin has preferred to continue the war against Ukraine. Germany’s Federal Intelligence Service concluded Russia’s military spending has been rising covertly. The BND estimates real military outlays in recent years exceeded officially reported figures by 66%. Last year alone, Russia spent about €250 billion on the war, versus the stated €150 billion.
According to German intelligence, military spending effectively swallowed about half of Russia’s entire budget and reached roughly 10% of GDP.
