Deficit Above Target: What Could the 2027 Budget Look Like?
The federal budget deficit for 2027 may rise from the planned 1.5% to 2% of GDP. Experts assess the outlook for oil and gas revenues, tax income, financing options through OFZ bonds and the National Wealth Fund, as well as the impact of fiscal policy on the Central Bank's key rate decisions.
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Under the current federal budget law for 2026 and the planning period of 2027–2028, preliminary budget parameters for next year look like this: revenues are planned at 42.9 trillion rubles, expenditures at 46.1 trillion, and the deficit at 3.19 trillion rubles, or about 1.5% of GDP. However, the country's main financial document, which the Finance Ministry traditionally presents in late September, may turn out differently. Together with experts, we examine what the budget's key indicators might be and how they will influence Russia's future economic policy.
Oil and Gas Revenues, Taxes, and New Government Spending
The main intrigue of the 2027 budget is how significantly its parameters will differ from the preliminary ones. And first and foremost, this concerns the revenue side. In the current plan, oil and gas revenues for next year amount to 9.05 trillion rubles, or 21.1% of all receipts. Meanwhile, the share of non-oil and gas revenues is expected to grow to 78.9%.
According to Candidate of Economic Sciences, Associate Professor of the International Business Department at the Financial University under the Government of the Russian Federation Victoria Zabolotskaya, in 2027 the source of growth in non-oil and gas revenues will primarily be tax receipts. This refers to corporate profit tax, VAT, personal income tax, and excise taxes—key payments that depend on the dynamics of business activity, consumer demand, and household incomes.
Additional revenues for the federal budget may come from changes in taxation of bookmaking companies, while regional and local budgets could benefit from the tourist tax and gambling tax. For instance, the maximum rate of the tourist tax in 2027 to 3% of accommodation costs: the specific payment amount will be set by municipalities.
At the same time, the oil market will remain an important factor for the revenue side. Finance Minister Anton Siluanov has already warned that the baseline scenario for next year considers a cutoff price in the budget rule at $50 per barrel ($9 less than in the 2026 budget). According to the minister, this will reduce the impact of price volatility in global markets on budget balance.
Financial expert, author of the Telegram channel "Economism"Alexey Krichevsky expects that oil and gas revenues in 2027 could rise relative to current levels. In his view, much will depend on how long the Middle East conflict lasts and the associated risks to oil supplies through the Strait of Hormuz—one of the key routes for global commodity trade.
"Expecting a serious price decline to early-year levels is probably naive. If oil was around $60 per barrel in January and $65–70 in February, it's now near $100. With the escalation continuing, we can expect prices to hold in the $95-110 range," Krichevsky believes.
Under a favorable scenario, oil and gas revenues could grow by approximately 30%, according to his estimate. Additional budget support could come from ruble weakness: when the national currency depreciates, the ruble value of export earnings increases. Beyond oil, fertilizer suppliers could gain additional export potential amid the tense Middle East situation, Alexey Krichevsky notes. However, this factor depends not only on price conditions but also on the stability of logistics, settlements, and demand in key foreign markets.
The expenditure side, according to experts, is also unlikely to see radical cuts. According to data cited by Victoria Zabolotskaya, total federal and regional budget spending on national projects in 2027 is preliminarily estimated at 6.734 trillion rubles—67.4 billion rubles more than the previous year.
The most notable funding increases are planned for infrastructure, environment, tourism, transportation, and space activities. Specifically, spending on infrastructure for living could increase by 24.8%, on environmental well-being by 38.4%, on space activities by 16.9%, and on tourism and hospitality industry development by 24.9%.
Meanwhile, official statements about the 2027 deficit level already diverge from last year's expectations. The current three-year plan sets it at 3.19 trillion rubles, or about 1.2% of GDP. However, Vladimir Putin has already announced that, according to preliminary estimates, the federal budget deficit in 2027 could reach around 2% of GDP. Alexey Krichevsky allows for an even more substantial deviation from the previous forecast. By his estimate, the 2027 deficit could reach 6–8 trillion rubles.
OFZs and the National Wealth Fund: Where to Find Money for the Growing Deficit
If the actual deficit turns out higher than the original plan, the government will need to increase its financing. The primary instrument here traditionally remains federal loan bonds (OFZs). However, opportunities to expand domestic borrowing depend on the financial market situation. In July 2026, after a series of unsuccessful placements, the Finance Ministry suspended OFZ auctions "in order to reduce increased volatility and help stabilize the market situation."This demonstrated that opportunities to finance the deficit through debt are not unlimited: with high bond yields, the Finance Ministry must choose between the need to raise funds and the reluctance to borrow at excessively high rates.
Responding to questions from Argument Media, Alexey Krichevsky noted that OFZs in 2027 will likely remain one of the main sources of deficit financing. At the same time, opportunities for further increases in the tax burden are limited in his assessment, so the government will have to rely on existing instruments.
"The tax burden has already been raised so high that there's nowhere left to go. We'll see this reflected in 2026's results in terms of tax collection and corporate bankruptcies. So the deficit, as usual, will be financed through devaluation and OFZ issuance," the expert believes.
However, changes to tax legislation are still being planned. As Deputy Finance Minister Alexey Sazanov announced at the Moscow Financial Forum, the Ministry of Finance is working with representatives from various industries on amendments that would allow expenses for protecting and restoring facilities to be tax-deductible. According to him, the changes will affect a wide range of industries, and the ministry plans to submit them to the State Duma in the fall.
Another important tool for covering the shortfall in oil and gas revenues is the National Wealth Fund (NWF), whose use is governed by the budget rule. But here too there's an important caveat: a significant portion of the NWF's assets are illiquid, so its capabilities are also limited.
"The NWF can certainly be used to finance the deficit for some time. But there isn't much in liquid assets, and rapidly selling illiquid assets would mean taking steep discounts," Krichevsky notes.
In other words, in 2027 the Finance Ministry will likely have to combine sources to cover the deficit: tapping domestic debt, reserve funds, and additional export revenues, as well as adjusting some expenditures.
Budget spending works against key rate cuts
The budget deficit is one of the factors the Central Bank considers when making key rate decisions. The more aggressively the government increases spending, the more it supports demand in the economy, which means the harder it becomes for the Central Bank to lower rates without risking a new surge in inflation.
At a press conference on September 11, Central Bank Chair Elvira Nabiullina stated directly that under current conditions—with high employment, elevated inflation, and inflation expectations— "every additional ruble of government demand stimulus moves us further away from lowering the key rate".
In Victoria Zabolotskaya's view, if budget expenditures increase by more than 1% of GDP in 2027, the regulator may maintain tighter monetary policy than the baseline scenario assumes. She allows that the key rate in such a case could end up above the average projected range of 10.2–12.5%.
Alexey Krichevsky points to a contradiction: on one hand, a significant deficit may amplify inflation risks and limit opportunities for rapid rate cuts. On the other hand, a high rate increases the cost of servicing government debt.
"The higher the rates, the harder it is for the budget. New borrowing comes at high interest rates, and servicing this debt becomes increasingly expensive. So we end up with a vicious circle," the expert says.
At the Moscow Financial Forum, Anton Siluanov noted that in preparing the new budget, the Government "aligned" with the Central Bank, so the regulator will still have room to maneuver. However, only time will tell whether the Finance Minister's forecast comes true.
What could go wrong
The most difficult risk to forecast for the 2027 budget may not be falling oil prices per se, but rather weaker-than-expected economic growth. In that case, the budget would face two problems at once: revenues from VAT, corporate income tax, and other taxes would fall short of plan, while the need for government spending would, on the contrary, increase.
Victoria Zabolotskaya calls this scenario the "scissors effect": budget revenues decline or grow more slowly than forecast, while expenditures continue to rise. An additional source of uncertainty remains volatility in global financial and energy markets, on which export earnings and oil and gas revenues still depend.
Alexey Krichevsky believes one of the underestimated risks is related to the sustainability of trade with China and India—key markets for Russian exports. This concerns not only oil and gas, but also fertilizers, metals, and other products.
"If there's any disruption here, it could be catastrophic for exporters and the budget," he notes.
Another risk is tied to expensive deficit financing. If the Finance Ministry has to borrow when OFZ yields are high, debt servicing costs will increase and narrow the possibilities for other budget items.
Ultimately, the 2027 budget will likely be not a budget of radical spending cuts, but a budget of difficult balancing. The Government will need to simultaneously maintain funding for key obligations and national projects, keep the deficit within acceptable limits without expanding the debt burden too much, and avoid creating additional grounds for maintaining a high key rate.
The authorities' baseline scenario assumes a deficit of around 2% of GDP with oil at $50 per barrel. However, the final parameters depend on so many factors—from the balance of supply and demand in the oil market to the pace of economic growth and the ruble exchange rate—that making precise forecasts is extremely difficult. If export and tax revenues exceed expectations, and events in global markets don't bring another round of "black swans," the budget deficit can be kept within plan. Otherwise, the Finance Ministry will have to seek additional sources of financing, but it's worth remembering—the capacity of both OFZs and the National Wealth Fund is not unlimited.
