“No Ceiling”: How the Government of the rf Turned Its People Into an ATM for the War

russia’s federal budget for the first quarter of 2026 has turned into a veritable financial absurdity: the deficit reached 4.576 trillion rubles – more than for the entire year of 2025. At the same time, GDP fell by 1.5%, industry is stagnating, construction and transportation are slumping, and the regions are ending the year with a 1.5 trillion ruble shortfall. Against the background of this economic catastrophe, the kremlin continues to spend funds at a rate of 17% higher than last year’s level, advancing payments on contracts even before work begins.

The revenue trends are particularly cynical. Oil and gas revenues plummeted by 45.4%, non-oil and gas revenues rose by 7.1%, and turnover taxes, particularly VAT, increased by 8.9%. All this – despite the fact that corporate profits in January fell to 70.9% of last year’s level, and the share of loss-making companies reached 38%. How is this possible? It’s simple – inflation, tax hikes, and total digital control over every ruble. At this, it is clear that russians themselves are allowing the authorities to impose new taxes on them, silently accepting the role of a silent donor. They are willing to live in greater poverty, and for their money to go not to schools or hospitals, but to “priority tasks”, which the kremlin calls a “special military operation”.

The ministry of finance of the rf calmly explains: “The high deficit at the beginning of the year is merely an advance payment.” In reality, however, the government is demonstrating that it is subject to no constraints whatsoever. It doesn’t matter whether the deficit is three or thirty-three trillion; the main thing is not to upset “key voter groups”: public sector employees, pensioners, and benefit recipients. It is precisely these categories, which the kremlin considers its mainstay, that are effectively financing the aggression against Ukraine. russian taxpayers, who feel the decline in their real incomes every day, are themselves giving the authorities the green light, without demanding accountability for the squandering of budget funds.

russia’s economy currently looks like this: the military-industrial complex gets everything, the rest gets nothing. The federal government shamelessly increases spending, while the regions are drowning in debt. And instead of acknowledging the failure of their policies, the authorities view their citizens, much like peter the first once did – as an inexhaustible source of taxes.  russians, who are enduring rising prices, job cuts, and a declining standard of living, are effectively paying for every missile, every bomb, and every day of the war which their government has unleashed against Ukraine.