Senior government officials warned Russian President Vladimir Putin that spending on the war in Ukraine was on track to push Russia toward economic bankruptcy, the US news outlet Bloomberg reported Tuesday.
Officials at Russia's Finance Ministry and central bank told the Kremlin that the current level of projected defense spending could dangerously widen the government's budget deficit, according to sources familiar with the matter and documents reviewed by the US outlet.
The officials, who have grown increasingly concerned in recent months about the state of Russia's economy and budget, proposed new cuts to defense spending, the sources said. It would be difficult to repair the country's strained public finances without finding additional efficiencies, they said.
However, divisions among policymakers meant that senior officials in the Defense Ministry and parts of the Kremlin, determined to advance Putin's war aims, insisted on protecting military spending. Cutting it would badly hurt the economy because so many businesses depend on military-related contracts, they argued.
Putin asked Finance Ministry officials to find spending cuts in other areas of the budget before focusing on defense, some of the people close to the matter said. All were granted anonymity to discuss the concerns, whose scope has not been made public. Kremlin spokesman Dmitry Peskov did not immediately respond to a request for comment.
Defense establishment demands more
The Defense Ministry is not only opposing cuts but is demanding additional funding, according to two people close to the Russian government. Military spending will have to rise to deal with a shortfall of up to 3 trillion rubles ($36 billion) this year, they said.
The president was aware of the budget pressures both last year and this year, so the challenges are not surprising, the people close to the matter said. The scale of any spending cuts will depend solely on Putin, since no major budget decisions are made without his approval and he serves as the ultimate arbiter, they said, describing it as an ironclad rule.
When the 2026 budget was drawn up, officials realized that a funding gap of about 1.2 trillion to 1.5 trillion rubles could emerge in the second half of the year, money that may be needed for the defense sector. At the time, there were hopes that the war in Ukraine would end after the summit in Alaska last August between Putin and US President Donald Trump, which would have made a reduction in defense spending in the second half of 2026 a reasonable assumption, according to people close to the Russian government.
Russia's financial hole sparked anger last week from a senior member of the lower house of parliament, though Valery Gartung, who heads the Competition Protection Committee, denied reports that he used profanity when recalling the hyperinflation Russia experienced after the collapse of the Soviet Union. "What are we going to do about it?" he asked. "Print money or what? Like in 1992, when prices rose by 30% every week? We understand that this is not the solution."
Strike on Kyiv
Russia launched a massive combined missile and drone attack across Ukraine in the early hours of Tuesday, June 2, killing at least 17 people and injuring more than 100 in strikes that hit Kyiv, Dnipro, Kharkiv and the Kyiv region, local authorities said.
The overnight strike caused fires, damaged high-rise residential buildings in several areas and knocked out power in parts of the capital. Five people were killed in Kyiv, according to Mayor Vitali Klitschko. Russia launched a massive combined missile and drone attack across Ukraine in the early hours of Tuesday, June 2, killing at least 17 people and injuring more than 100 in strikes that hit Kyiv, Dnipro, Kharkiv and the Kyiv region, local authorities said.
"One victim died in the hospital. Five people died as a result of the attack on the capital on June 2," the statement said. According to the State Emergency Service, known as DSNS, as of 8 a.m., four people had been killed and 58 wounded in Kyiv, including three children.
The attack spread beyond the capital, with reports of deadly strikes in Dnipro and damage in Kharkiv. In Dnipro, overnight strikes killed four people and wounded at least 16, Dnipropetrovsk regional governor Oleksandr Hanzha initially said on Tuesday morning.
