The Central Bank and the Ministry of Finance warned Putin that military spending is unaffordable for the Russian budget

Senior officials from the Ministry of Finance and the Central Bank of Russia warned Vladimir Putin that the current level of defense spending is leading to a dangerous increase in the budget deficit, Bloomberg writes, citing sources. The material is available by subscription, it was retold by The Bell .

Officials proposed cutting military spending, but Putin instructed the Ministry of Finance to look for savings in other budget items without affecting defense. Bloomberg calls it "the most serious sign of internal divisions in Moscow" since the start of the full-scale Russian-Ukrainian war.

The Ministry of Defense and some Kremlin representatives not only resist such cuts, but also demand additional funding. They fear that cutting defense spending will harm the economy - many Russian enterprises depend on defense contracts, the agency writes.

Two sources close to the government estimate that the Defense Ministry's deficit in 2026 could reach three trillion rubles ($36 billion).

According to Bloomberg, when drawing up the 2026 budget, officials hoped for an end to the war. They hoped that after Putin’s meeting with US President Donald Trump in Alaska, military spending would be reduced in the second half of 2026. However, peace has not come, and the sharp rise in oil prices due to the war in the Middle East is not enough to solve Russia's problems. For a significant improvement in the situation, oil must remain above $100 per barrel for at least a year.

The head of the Ministry of Finance of the Russian Federation, Anton Siluanov, asked back in February to reduce expenses of all budget items for 2026, except for the military, the Financial Times newspaper reported at the end of May.

• The latest version of the Russian budget for 2026 provides for a deficit of approximately 1.6% of GDP (3.79 trillion rubles).
• In the first quarter, the budget deficit amounted to 2.5% of GDP (5.9 trillion rubles). This is the worst indicator since the beginning of a full-scale war. The Ministry of Economic Development of the Russian Federation lowered the forecast for GDP growth in 2026 three times - from 1.3% to 0.4%.