Bloomberg: The Kremlin Is Cutting Spending Nationwide To Fund The War

Russian authorities publicly deny that there are any serious problems.

Military spending pushed the Russian budget to the brink of a severe cash shortage this spring. This is according to an investigation by Bloomberg, based on information from sources familiar with the situation.

In April, Russian Finance Minister Anton Siluanov warned Prime Minister Mikhail Mishustin that the government might not have enough funds to make all scheduled payments on time. The balance in the Federal Treasury’s single account had fallen to approximately minus 5.5 trillion rubles, or about $65 billion.

Following this, the authorities shifted to a regime of strict austerity. “Non-military spending has already been cut by about 35%, and there are plans to reduce the size of the federal bureaucracy by another 15%,” Bloomberg reports.

The federal budget deficit for January–April reached 5.8–5.9 trillion rubles—about 2.5% of GDP. This is nearly double the figure for the same period last year. Public debt servicing costs are creating additional pressure. According to the Russian budget, these costs account for about 4 trillion rubles, or roughly 9% of all federal spending.

At the same time, Moscow has no intention of cutting military appropriations. Representatives of the Ministry of Finance and the Central Bank have warned Putin about the unsustainable growth in war-related spending. The military budget overrun could range from 2 to 4 trillion rubles this year.

Russian authorities publicly deny the existence of any serious problems. A few days before the Bloomberg report was published, Siluanov stated that the budget “has no problems” and is “fully funded.”

“Putin refused to cut military spending, directing the cuts to other budget items,” Bloomberg writes.

The financial strain of the war is increasingly taking its toll on civilian spending, while the Kremlin continues to prioritize maintaining the military budget.

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