Russia Can Manage Its Growing Deficit, Putin Says

Sep. 3, 2026 Vladimir Putin delivers a speech at the Eastern Economic Forum in Vladivostok on Sept. 3, 2026. Sputnik / Vyacheslav Prokofyev / Pool via REUTERS President Vladimir Putin said Thursday that Russia's budget deficit, which grew by 40% in the first half of this year to reach 2.8% of GDP, poses no "critical" risk for the economy and remains manageable. "Considering that we have one of the lowest levels of national debt in the world, there is nothing critical here," the Kremlin leader said at the annual Eastern Economic Forum in Vladivostok. The costs of Russia's war against Ukraine have gradually risen since Putin ordered the full-scale invasion in February 2022. In recent years, the government has had to raise taxes and increase borrowing to help finance the military. Russia's official deficit target for this year is 1.6% of GDP. The growing budget deficit and new inflation risks are major factors that Central Bank policymakers are weighing ahead of next week's key rate meeting. For months, businesses have pushed for the regulator to lower the key rate, which currently stands at 14%. Analysts polled by Reuters this week said they expect Russia's Central Bank to hold the key rate. At the Eastern Economic Forum on Thursday, Putin said it was important that high borrowing costs not hamper business investment too much, but added that it remains critical for monetary policy to address inflation risks. Annual inflation in Russia stood at 6.3% as of Aug. 31, according to the Economic Development Ministry. Countering claims by businesses that credit has become off-limits for some, Putin said the government has developed multiple loan programs to support firms even in the high-rate environment. Reuters contributed reporting. Read more about: Putin , Economy Sign up for our free weekly newsletter Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview Subscribers agree to the Privacy Policy We sent a confirmation to your email. Please confirm your subscription. A Message from The Moscow Times: Dear readers, We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent." These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia. We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help. Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact. By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us. Once Monthly Annual Continue Not ready to support today? Remind me later. × Remind me next month Remind me Thank you! Your reminder is set. We will send you one reminder email a month from now. For details on the personal data we collect and how it is used, please see our Privacy Policy. Read more Putin Demands Answers as Russia’s Economy Undershoots Expectations He called for urgent measures to revive growth in what marks his second public complaint about economic weakness in a month. 3 Min read 'Everyone Is Anticipating a Breakthrough': Russian Stock Market Surges on News of Putin-Trump Alaska Summit Despite the rally, analysts warned that the current market euphoria may prove fragile if the summit fails to deliver concrete results. 2 Min read Putin Opts Against Stricter Capital Controls Amid Ruble's Slide – Vedomosti Exporters had “informally” agreed to raise foreign currency sales, allowing the government to avoid the “last resort” option of imposing capital... 2 Min read Putin Calls West ‘Empire of Lies’ as Sanctions Slam Russian Economy Severe financial punishments imposed by the West over Russia's invasion of Ukraine have sent the ruble into a tailspin.