By Sultan Musayev | 2026-06-16

Russia's National Wealth Fund has shrunk by 60% since the invasion of Ukraine. The federal budget deficit hit 5.9 trillion RUB ($82 billion) in just the first four months of 2026, already 50% above the government's target for the entire year. And top officials at the Finance Ministry and the Central Bank have now told President Vladimir Putin directly: the spending cannot continue.

The message is not getting through.

Officials sound the alarm

Bloomberg reported June 1 that Finance Ministry and Central Bank officials proposed cutting military spending, arguing the government cannot rebalance public finances without reducing pressure on the budget. The Defense Ministry rejected the proposal outright and countered with a request for an additional 3 trillion RUB ($42 billion) to cover its current funding shortfall.

Finance Minister Anton Siluanov stopped short of public confrontation, but his May remarks to Kommersant were blunt. He called for "a certain restraint" in state spending and reminded officials that "reserves are not infinite."

Central Bank Governor Elvira Nabiullina struck a similar tone at the April Exchange Forum. She attributed the high key interest rate to the "worsening of external conditions" -- the standard official euphemism for Western sanctions -- which has suppressed both exports and imports and pushed inflation to 10%.

"We cannot continue to live at this pace," she said.

The Economic Development Ministry has slashed its 2026 growth forecast to 0.4%, effectively signaling a recession.

Dissent grows in the Duma

Concern is spreading inside the State Duma as well. Lawmaker Valery Gartung broke with decorum in a floor session, demanding to know how the government plans to plug a total deficit he estimated at around 11 trillion RUB ($154 billion).

"Print money? Like in '92, when prices jumped 30% every week?" he shouted at colleagues.

State Duma deputy Renat Suleimanov of the Communist Party went further, drawing a direct line between military expenditure and national stagnation.

"Officially, defense and security account for 40% of the federal budget. What kind of development, investment, or capital allocation can we even talk about?" he said. "Neither tanks nor artillery shells have consumer value: the economy produces them, but the population cannot consume them. They are pure expenses."

Suleimanov called for "the earliest possible conclusion" to the war and warned that its costs would outlast the fighting. A million veterans will eventually return to civilian life, he said, with no clear plan for jobs, wages, or social reintegration.

"The problems will not just disappear," he said. He also noted that the war "has already lasted longer than the Great Patriotic War."

His remarks stand apart from the Kremlin's standard line, which holds that defense spending drives industrial growth and employment.

'An illusion of prosperity'

Outside observers see the trajectory as irreversible.

Zhyldyz Aliyeva, a columnist for the Almaty-based newspaper Delovaya Nedelya, told Kontur that political and military priorities have consistently crowded out economic caution.

"These warning signs have sounded before, but nothing changed," she said. "The Russian government simply started looking for reserves in the civilian sector, tightening the population's belts even further."

Elmira Suranchieva, a Bishkek-based economist who monitors the Russian economy, told Kontur that Moscow's wartime economic model has run its course.

"Massive injections of money into defense plants created only an illusion of prosperity but brought no benefits to real life," she said.

If military spending keeps widening the deficit, Russian authorities face an unpleasant binary, Suranchieva said: slash pensions and welfare benefits, or print money and devalue the ruble.

"The economy cannot run in military mode indefinitely; even officials and propagandists loyal to the Kremlin understand this," she said.