At the beginning of 2026, negative dynamics in key macroeconomic indicators were recorded in the Russian Federation. As stated by President Vladimir Putin during a meeting on economic issues, the country is facing a decline in gross domestic product and industrial production.
This is reported by Business • Media
GDP Decline and Budget Deficit
Putin reported that in January 2026, Russia’s GDP decreased by 2.1% compared to the same period last year, while industrial production fell by 0.8%. This is the first GDP decline since 2023, as confirmed by official statistics. The financial situation of the state is further complicated by a significant federal budget deficit, which reached 3.5 trillion rubles (approximately 35 billion USD) for January-February, accompanied by a decrease in budget revenues.
“In January, Russia’s GDP was 2.1% lower than last year. Industrial production decreased by 0.8%,” noted Putin, adding that there is nothing unexpected about this.
The President emphasized that balanced decisions must be made to ensure the long-term sustainability of the budget system for economic growth, calling this an important condition for the country’s development. It is worth noting that the Russian government initially forecasted economic growth of over 2% in 2026, but later revised this figure down to 1.3%. However, even this revised forecast may prove to be overly optimistic in light of current trends.
The Impact of Oil Prices on Budget Decisions
Despite negative macroeconomic trends, the rise in global oil prices following the onset of hostilities in the Middle East has allowed the Russian government to postpone planned budget cuts and changes in financial policy. Experts suggest that due to the U.S. war against Iran, Kremlin revenues could increase by an additional 14 billion dollars per month. According to forecasts, by April 2026, oil and gas revenues for the Russian budget could rise by 70% compared to March, temporarily compensating for financial losses and avoiding immediate structural budget reforms.