Russia imposes spending cuts after April liquidity crisis exposes war costs

Russia’s war budget just hit a wall. The Kremlin has imposed sharp spending restrictions after an April liquidity crisis laid bare the spiraling financial toll of its invasion of Ukraine, with the federal deficit for the first four months of 2026 reaching roughly ₽5.9 trillion, or about 2.5% of GDP. That number is striking for one reason: Russia’s full-year deficit target was ₽3.8 trillion. Moscow blew through it before May even started, marking the steepest fiscal shortfall since the full-scale invasion began in 2022. The numbers behind the squeeze Military and security spending now accounts for approximately 40% of Russia’s federal budget, totaling around ₽16.84 trillion. Finance Minister Anton Siluanov saw this coming. In a February letter to the cabinet, he flagged potential war-related overspending of up to ₽2 trillion, warning that under adverse conditions, the figure could balloon to ₽4 trillion. His proposed solution: postpone ₽2.9 trillion in planned expenditures that fall outside the military and social safety net categories. The first quarter alone produced a ₽4.6 trillion deficit, more than double the same period last year. By the time April’s liquidity crunch materiali...