Federal budget deficit narrows in August despite weak oil-and-gas revenue flow.

RUSSIA ECONOMICS - In Brief 09 Sep 2026 by Evgeny Gavrilenkov

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Minfin reported that oil-and-gas (O&G) revenues reached R6.0 trln in 8M26, down 16.7% y-o-y, while non-O&G revenues rose 18.1% y-o-y to R20.9 trln. The 2026 targets are R8.9 trln for O&G and R31.4 trln for non-O&G revenues. By August, O&G revenue collection had reached only 56.2% of the annual plan, with little chance of catching up – as even though the ruble weakened in recent weeks despite rising oil prices, this shift looks not to be enough to offset shortages seen in the early months of this year. Non-O&G revenues grew in August, as is typical when state-owned companies pay dividends to the budget. Last year saw similar seasonal growth for the same reason. However, in August 2026, these revenues posted an 11.6% y-o-y increase. Overall, non-O&G revenues are expected to slightly exceed this year’s target, while O&G revenues will likely fall short. Notably, the share of O&G revenues dropped to 19.3% of total federal budget revenues in 8M26 – a historic low. The budget deficit in 8M26 narrowed to R5.8 trln from R6.5 trln in 7M26 as the government scaled back spending. In August, the budget even showed a surplus of just under R0.7 trln. The government put the 8M26 deficit at 2.5% of GDP, compared to the full-year cap of 1.6% of GDP (R3.8 trln). However, because spending was front-loaded earlier in the year, by 8M26 about 72% of the annual budget had already been used. It’s still uncertain whether the authorities will sharply revise this year’s plan or opt for a modest increase in the spending target, with a bigger push at the start of 2027 - a pattern that’s been common since 2023. The draft 2027 budget and any 2026 revisions are expected in a few weeks. For now, it’s c...