Russia’s regions post largest-ever total budget deficit for 2025

Regional governments across Russia ran up a record total budget deficit in 2025, state-affiliated business daily Kommersant reported on Thursday.

According to analysts at ACRA, a Moscow-based credit agency, the total regional budget deficit for 2025 amounted to 1.48 trillion rubles (€16.3 billion), over three times larger than the regional budget deficit for 2024 (407 billion rubles, €4.5 billion), which was itself the highest recorded deficit at the time.

While the total revenue recorded by regional governments rose by 4% compared to 2024, takings were outpaced twofold by a 9% increase in total expenditure. Of the 89 regions included in the analysis (five of which are illegally annexed regions of Ukraine), 74 ended 2025 in the red; 24 more than in 2024. The single largest absolute deficit was reported by the city of Moscow, at 229 billion rubles (€2.5 billion).

Two-thirds of regional government deficits for 2025 have been covered by previously accumulated funds. The remainder has been financed primarily by bank loans, amounting to 449 billion rubles (€4.9 billion).

Kommersant noted that a significant factor in the record-high deficit was a 9% fall in corporation tax revenue in 2025, due to a difficult climate for Russian business. As such, overall tax revenue fell in in 55 regions.

The news comes as Russia enters the fifth year of its illegal war in Ukraine, with businesses finally feeling the effects of economic stagnation and Western sanctions. Nearly 40% of the federal government’s budget has been set aside for military and police expenditure in 2026–28, amounting to 12.93 trillion rubles (€133.5 billion) per year.