Russia's financial situation is deteriorating: Moscow sharply reduces investments
Power Moscow has decided to reduce investment spending by approximately 10% in 2026. This is the first reduction in such expenditures since the COVID-19 pandemic. This is reported by the agency Reuters.
According to the mayor of Moscow Sergei Sobyanin, The growth rate of city budget revenues slowed significantly. In the first two months of the year, revenues increased by only 2%, while the budget envisaged an increase of approximately 6.5%.
As a result, the capital's authorities are forced to revise the investment programme, which was previously estimated at around RUB 1.2 trillion.
Financial pressure on Russian regions
Cost cutting in the capital is considered to be a telling signal for the entire Russia, where more and more regions are facing budgetary difficulties.
According to economists, the cumulative deficit of the country's regional budgets has grown sharply. In 2025, it more than doubled to approximately RUB 8.3 trillion, which is almost 41% of the country's gross domestic product.
Some regional administrations are forced to attract expensive commercial loans as access to concessional loans from the federal budget is shrinking.
Reasons for the deteriorating financial situation
Experts attribute the deteriorating budget situation to several factors. These include a decline in energy export revenues, rising government spending and a slowdown in economic activity.
In addition, Russian oil is sold on the world market at significant discounts, which reduces budget revenues.
Against this backdrop, even the richest regions of the country are forced to review their spending and cut investment programmes.
A signal for the Russian economy
Analysts say that the decline in investment in Moscow may be indicative of deeper financial problems in the Russian economy. Rising costs, coupled with declining revenues, are putting increasing pressure on regional budgets and forcing the authorities to limit investment.
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