CMACR Revises Economic Forecast for Russia: Budget Deficit and Rising Oil Prices

The analytical center CMACR, which has close ties to the Kremlin, has updated its economic forecast based on the assumption of significantly more expensive oil. According to their estimates, this will have a considerable effect on the financial situation in Russia. The new data indicates that the country's budget deficit will exceed previous expectations, and economic growth in 2026 is projected to be no more than 1.3%.

CMACR's baseline scenario is based on the assumption that the 'active phase of the military conflict will last until approximately October' and will have medium-term consequences for commodity markets. Consequently, the center's analysts have raised the forecast for the average export price of Russian Urals oil from $55.6 to $81.6 per barrel. This figure significantly surpasses the budgeted $59 and is nearly double the prices recorded in January and February ($41 and $44.5, according to the Ministry of Economic Development). The peak prices are expected to occur in the second quarter, with a slight decrease by the end of the year, while the discount of Urals to the benchmark Brent is expected to narrow significantly.

These changes are anticipated to lead to a massive influx of oil dollars and a strengthening of the ruble to 70-73 rubles per dollar by December, according to CMACR. However, such an exchange rate could negate a significant portion of the benefits from high oil prices: the increase in natural rent will have a 'very moderate' effect on the economy, the center warns.

Part of the rent exceeding the baseline level, calculated based on $59 per barrel, may be spent, CMACR suggests. Analysts expect the total budget deficit to exceed the planned 3.8 trillion rubles, with a structural primary deficit of around 1% of GDP. This additional deficit, according to experts, may be covered by the balances in the Treasury accounts and revenues from privatization.

CMACR estimates that the effect on the economy will primarily manifest as an increase in consumer spending due to the redistribution of rent: it is expected to rise by 1-1.4%, whereas the February forecast was 0.5-0.9%. Consumption has been the main driver of the economy over the past year, and the GDP growth forecast has also been raised, albeit slightly: from 0.5-0.8% to 0.9-1.3%. In the first quarter, and possibly in the second quarter, the Russian economy may face a decline, with growth expected to resume only in the second half of the year.

The inflation forecast has been significantly raised from 4.8-5.1% to 5.8-6.1%. High interest rates are expected to lead to an increase in financial investments, but not in fixed capital, CMACR predicts. Investments in non-energy sectors are expected to decline, leading to an overall downgrade of the forecast by 2 percentage points. The decline is expected to be 1.6-2%, despite anticipated growth in 'permitted' investment imports, which will be supported by the strengthening ruble.

CMACR warns of a high probability of 'Dutch disease,' where the positive effects of favorable economic conditions, particularly due to currency strengthening, become confined to a narrow circle of rent-receiving sectors and spread only minimally to the economy as a whole.

Additionally, CMACR has raised its forecast for Urals prices for the next two years: from $58 and $59 to $72 and $67 per barrel. Consumer countries will replenish their stocks, and producers will mitigate the effects of the conflict on production and transportation infrastructure; however, sanctions against Russian oil may be reinstated, leading to a gradual increase in discounts on it.

Previously, it was reported that Russian oil and gas revenues in 2025 plummeted to their lowest levels since the coronavirus pandemic. The Russian budget may face a significant deficit as early as the beginning of 2026 due to shortfalls in oil and gas revenues, government officials admit. Ukrainian intelligence has also noted that the financial condition of medium and large enterprises in Russia continues to deteriorate, demonstrating increasing imbalances in the corporate sector.

More than half of large companies in Russia ended 2025 with falling profits, reduced or completely frozen investment projects, and many are preparing to lay off employees. On February 24, 2026, it was reported that around 300 companies in Russia are preparing to close. For the first time in history, 74 Russian regions found themselves in a financial hole, indicating the beginning of a wave of mass business closures.

The Russian Ministry of Finance acknowledged that the hole in the aggressor's treasury is growing at a record pace, and Rosstat confirmed that over 17,000 Russian enterprises reported losses. Oil prices resumed their rise on March 31, 2026, after a previous decline during trading on media reports that U.S. President Donald Trump would like to end the war with Iran.

VkusVill, the first major grocery retailer in Russia, has begun to scale back its trading network: by the end of 2025, the company closed 286 stores. Magnit, the largest retail chain in Russia by the number of stores, ended 2025 with a net loss. On April 3, 2026, it became known that 22 Russian industries went into a severe deficit, and the price of oil surpassed $140, soaring to an 18-year high.