Russia Mid-Year Deficit Reaches $61B – Exceeds Entire Annual Target

Andriy Yermak, the head of Ukraine’s Presidential Office, said on Friday that Russia’s budget deficit rose by $13 billion in July, bringing the total deficit this year to $54 billion.

Yermak also said Moscow’s expenditure rose by “20.8% year-on-year, while revenues increased by only 2.8%.”

“The Russian budget today is a bubble. In July alone, the deficit amounted to a whopping $13 billion. In January-July, it reached $54 billion, which is more than annual expectations,” Yermak wrote in his Telegram update.

In comparison, Ukraine’s projected budget deficit for 2025 stood at Hr.1.7 trillion ($41.5 billion), excluding all grants, according to the draft state budget, with a projected budget deficit of $46.3 billion for 2026.

While Yermak did not specify the source of his figures, a report by The Moscow Times indicated similar trends, with the additional footnote that the deficit had already exceeded the planned target for all of 2025, despite having just passed the half-year mark. 

The outlet, citing a press statement from Russia’s Finance Ministry on Friday, said Moscow’s budget deficit actually reached 4.88 trillion rubles ($61.1 billion) this year thus far – the equivalent of 2.2% of Russia’s GDP.

It added that the sum is above the revised target of 3.8 trillion rubles ($48 billion) – or approximately 1.7% of GDP, as detailed by Reuters – for the entire year, signed by Russian leader Vladimir Putin just earlier this summer.

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It is unclear what led to the discrepancy between Yermak’s and Russia’s official figures.

While Moscow blamed decreased oil and gas revenues – down approximately 19% year-on-year – as well as “advance financing” earlier in 2025 for the downturn in July, experts believe budget blowout is also to blame.

The West’s planned additional sanctions and tariffs targeting Russia’s oil and gas revenues are likely to exacerbate the country’s economic crisis once they come into effect.

In July, spending surged over 24% from a year earlier, pushing total outlays for the first seven months up more than 20% to 25.2 trillion rubles ($317 billion).

Revenues, meanwhile, have shown little growth.

“Reality has turned out worse than our most pessimistic forecasts,” the MMI analytical group wrote on Telegram, as cited by The Moscow Times.

In his Friday update, Yermak also made a playful comparison using characters from the Lord of the Rings stories. He said Russia is more like “Gollum,” a sneaky and obsessed thief, rather than “Sauron,” the all-powerful and evil ruler.

“You can pretend to be Sauron all you want, but when the economy is collapsing due to war, you are just a sinful Gollum hiding your leaky pocket from the eyes of the whole world,” Yermak wrote.