This text is an automatic translation from Русский. It was generated by AI and may contain inaccuracies.
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This text is an automatic translation from Русский. It was generated by AI and may contain inaccuracies.
Read original →Putin has signed the 2026 budget with public debt at 14% of GDP and social spending of 19 trillion rubles. A comparison with the budget crises in Germany, France, and the United States. Pension indexation, maternity capital, and support for special military operation participants.
Vladimir Putin signed Russia's budget for 2026 with a deficit of 3.79 trillion rubles and low public debt of around 14% of GDP. Unlike European countries facing budget crises, the Russian budget maintains its social focus with pension indexation of 7.6% and large-scale support for families. Priorities remain social payments (19 trillion rubles), infrastructure (4.7 trillion rubles for roads), and defense (13 trillion rubles).
European countries, the United States, and Russia are entering almost simultaneously into the phase of making key decisions on their budgets for 2026. All countries must decide which expenditures are now priorities and what will have to be sacrificed. And the main task of any government is to get the budget approved by parliament.
In no leading country in the world has a budget ever been adopted without a single amendment, which is why the budget cycle begins in October in many countries. In federal states, draft budgets always receive a large number of amendments from deputies and members of the upper house of parliament. And while most amendments are aimed at improving people's lives, one key factor must be considered. There are often insufficient resources for all these "wishes," which is a fundamental law of economics. So many begin looking for borrowed funds. However, public debt isn't elastic, and a budget crisis can paralyze not only the government but the entire state.
As January approaches, budget battles in most countries worldwide are entering the home stretch. Argument Media spoke with professor and dean of the Faculty of International Economic Relations Pavel Seleznev about how budgets are adopted in leading European countries.
Germany, in order to simultaneously finance defense, infrastructure, and the social sector, is resorting to large-scale borrowing: the new budget provides for over €180 billion in additional debt (the highest since the coronavirus era). Moreover, Germany's public debt already stands at 63.5% of GDP. Pavel Seleznev is confident:
"Germany may have approved its 2026 budget, but it did so at the cost of a sharp increase in defense spending, which intensifies debt pressure and means that social programs supporting families and migrants will receive less than required."
The spending increase in Germany is directly linked to growing public debt above constitutionally permitted levels—the "debt brake," which for years was considered sacrosanct. Under this rule, Germany's budget cannot have a structural deficit exceeding 0.35% of GDP, except in exceptional circumstances, which included the COVID era. Yet for 2026, a deficit of around 3.8%–4.0% of GDP is planned, resulting from suspension of the "brake" due to an "emergency situation" (a combination of the energy crisis, the aftermath of the 2022–2023 inflationary shock, and rising defense spending following the start of the special military operation).
In France, budget adoption is failing altogether. The deficit in 2024 reached 5.8% of GDP, while public debt in the first quarter of 2025 already exceeded 115% of GDP. Deficit forecasts for 2026, given the planned expenditures, also remain high—at 4.7%, exceeding the EU-mandated limit of 3%. Pavel Seleznev also points to social issues that concern both the "left" and "right" in parliament:
"In France, due to a divided parliament, social benefits cannot be paid in full, which is why the National Assembly almost unanimously rejected the 2026 budget after thousands of amendments."
The U.S. experienced the longest government shutdown in history—a halt of federal agencies due to the inability to approve a package of budget resolutions. Congress has already resorted to temporary funding measures several times, reflecting a deep divide between the House of Representatives and the Senate. Key disputes concern the level of defense appropriations, the redistribution of spending between federal and state programs, and attempts by the "hard-right wing" of Republicans to tie the budget to immigration policy. As a result, departments from Treasury to Defense are forced to plan operations under uncertainty, freeze contracts, and postpone hiring. For the economy, this means rising transaction costs, the threat of delays in social program payments, and reduced predictability of fiscal policy in the world's largest economy.
At the end of the third quarter of 2025, Russia's external public debt, according to estimates the Central Bank, amounts to just over 14% of GDP, which is not only a safe level compared to European countries, but also low relative to generally accepted standards of international financial institutions. At the same time, public debt is also planned to grow at a safe level (1.6% of GDP). This level is several times lower than that of Western countries (France — 4.9%, Germany — 4%). As a result, the Russian budget deficit will amount to 3.79 trillion rubles — this is the difference between planned revenues and expenditures, which will allow all social obligations to be fulfilled. This was confirmed in a conversation with Argument Media by State Duma deputy and member of the Committee on Labor, Social Policy and Veterans' Affairs Ekaterina Stenyakina:
"Whatever the foreign policy situation, the federal budget must be socially oriented — this is the goal the president sets for the State Duma and the Government. Therefore, our task is not simply to maintain payments at a stable level by indexing them to projected inflation, but to increase them year after year."
The structure of 2026 expenditures shows that the social agenda is not just declarations, but a real financial priority. Social Fund expenditures will amount to nearly 19 trillion rubles, which is significantly higher than the current level (by 10%). Insurance pensions are being indexed by 7.6% — above the projected inflation, which is set at 4-5%. The average insurance pension will rise to 26.7 thousand rubles. Moreover, according to Ekaterina Stenyakina, payments to people with disabilities will also be increased:
"And the insurance disability pension is calculated individually for each person, but always includes a payment, the amount of which from 2026 will be 9,584 rubles."
Another important aspect is families with children and healthcare. The "children's budget" for three years exceeds 10 trillion rubles. Maternity capital is increasing to 737 thousand rubles for the first child and nearly 974 thousand rubles for the second. For 2026 alone, 566 billion rubles are allocated for this program.
More than 1 trillion rubles over three years has been allocated for the national project "Long and Active Life." More than 230 billion rubles goes to the "14 High-Cost Nosologies" program, covering more than 150 thousand patients with rare diseases annually. In fact, the social portion of the budget has become one of the most substantial in numerical terms in recent years.
The infrastructure block is the "second pillar" of the budget. One of the government's key decisions was to preserve benefits for the IT sector. This is due to the significance of the sector for the entire country as a whole and for business in particular. The importance of developing domestic software was noted in an interview with Argument Media by Candidate of Economic Sciences, Associate Professor of the Department of Modern Management Technologies at RTU MIREA Anna Yakovleva:
"IT will be actively integrated into all sectors of the economy in the future, which is especially important for technological sovereignty. Software tax breaks will boost the competitiveness of Russian products compared to foreign ones, and this is an important factor for businesses, which will be more inclined to choose Russian products when faced with two identical options."
Another strategic priority is road development. According to Yakovleva, road infrastructure ensures not only the movement of ordinary Russians, but also business logistics, which helps reduce transaction costs. The budget allocates more than 4.7 trillion rubles for road infrastructure in 2026–2028. The main priority will be completing several major reconstruction projects on federal highways M-5 "Ural" and M-7 "Volga". The associate professor at RTU MIREA is confident:
"This will have a positive impact on both the overall federal economy and strengthen the economic potential of the regions through which these highways pass."
Given geopolitical realities and the ongoing special military operation, despite Russian attempts to achieve peace, national defense spending remains stable. The budget provides for almost 13 trillion rubles — 700 billion rubles less than in 2025, which is related to the already completed modernization of the country's defense industry, as well as cost optimization in the sector. However, even in this area, the key focus remains on people: employees of defense enterprises, participants in the special military operation, and their families.
The "Defenders of the Fatherland" Foundation, created to support wounded veterans, participants in the special military operation, and their families, will receive more than 50.5 billion rubles in support over three years (+7% under the amendments). Rehabilitation programs for participants in the special military operation are being expanded: high-tech prosthetics and rehabilitation centers are being created, medical infrastructure and infrastructure for military personnel are being developed. Housing support for military personnel and work with NGOs that help families are being strengthened. Moreover, an important task integrated into the activities of all government bodies is supporting the families of participants in the special military operation and veterans. As State Duma deputy Ekaterina Stenyakina:
"When it comes to helping participants in the special military operation and their loved ones, we primarily focus on the requests of soldiers' families. They tell us what measures are lacking, and State Duma deputies, as well as the president, the Government, and the Federation Council, come forward with legislative initiatives. For example, a law was passed stating that soldiers' relatives have the right to 35 days of unpaid leave during their rehabilitation."
And according to Stenyakina, beyond direct support, equally important psychological adaptation measures are being implemented, as these will enable veterans to reintegrate into society and family life. To this end, parliamentarians together with psychologists from Moscow State University have created separate projects. For example, "Life After Victory", aimed at socializing servicemembers after demobilization. Deputy Stenyakina notes:
"We (deputies) understand that when the Special Military Operation concludes with victory, hundreds of thousands of men will return from the front. They will need competent assistance with resocialization and adapting to peaceful life. In summer 2025, United Russia together with the Psychology Department of Moscow State University launched the 'Life After Victory' support school for wives and mothers of Special Military Operation participants. Lectures on the fundamentals of psychological assistance and social support measures proved highly popular with the women's community, and the second cohort begins in December."
The global 2026 budget season is unfolding under the banner of deficits, painful taxes, and political divisions. France remains without a final budget, Germany is increasing its debt, and the U.S. is operating on temporary funding.
Viewed this way, Russia's budget looks different: it combines a substantial social component, major infrastructure investments, and systematic support for defense and participants in the special military operation. And it does so while maintaining a manageable deficit and moderate tax burden. The signed budget establishes a predictable framework for the coming year and demonstrates that the key parameters of economic policy remain stable and under control.
The document went through political coordination and significant adjustments to address society's demands. Moreover, there's a substantial portion of projects that tackle economic challenges without directly spending financial resources, which increases their importance.
Despite external challenges, the budget has maintained its focus on supporting core sectors and developing specific industries, as confirmed by the targets laid out in it.