Russia's Finances Predicted to Face a Cold Summer 0 13

Officials from the Russian Ministry of Finance and the Central Bank have warned President Vladimir Putin that Russia cannot afford its current level of military spending, Bloomberg reports, citing sources and reviewed documents.

According to the publication's sources, representatives from the Ministry of Finance and the Central Bank warned that the current level of defense spending threatens a dangerous increase in the budget deficit. This, in the opinion of the sources, is the most serious sign of internal disagreements in Moscow since the beginning of the full-scale invasion.

The sources told the agency that officials proposed cutting military spending but faced resistance from the Ministry of Defense, which, according to them, not only rejects cuts but also demands additional funding to cover a budget deficit of three trillion rubles. Putin, according to Bloomberg's sources, instructed the Ministry of Finance to first look for savings in other budget items.

According to Bloomberg, when drafting the budget for 2026, officials expected that after Putin's meeting with Trump in Alaska, military spending could be reduced in the second half of the year. Sources close to the Russian government told the publication that the sharp rise in oil prices due to the war in the Middle East does not solve the problem – for a significant improvement in the situation, oil must remain above $100 per barrel for at least a year.

Finance Minister Anton Siluanov stated in an interview with Kommersant the need for "certain restraint" in government spending, emphasizing the priority of defense spending and the government's fulfillment of social obligations.

"Reserves are not infinite. Financial weakness is unacceptable in the context of such large-scale transformations in the world. It is necessary to increase the efficiency of budget expenditures," he said.