Russia’s Budget Strategy: Economic Sovereignty and Social Security

Muna Chand

Russia’s draft budget for 2027–2029 sets out three priorities: fulfilling social obligations, increasing household real incomes and protecting public finances from fluctuations in oil and gas prices. The plan, presented by Finance Minister Anton Siluanov at a Federation Council meeting, links economic stability with national development and economic sovereignty.

For the next three years, the government has set the benchmark price for Urals crude at $50 per barrel, down from $59 this year. Oil and gas revenues are also projected to account for no more than 17% of total budget revenue. The lower benchmark is intended to help the government meet its obligations even if energy prices fall. It also reflects an effort to make public finances less dependent on energy-sector revenues.

Social security is one of the budget’s main priorities. The government plans to adjust payments to veterans and people with disabilities, as well as maternity capital, in line with inflation in the previous year. Insurance-based pensions are due to rise in two stages in 2027. The proposal calls for a 6.8% increase in February, based on estimated inflation in 2026, followed by a further 3.3% increase in April, based on wage growth. The average old-age pension is projected to reach 29,904 rubles by the end of the year. The subsistence minimum is also set to rise by 6.8%, to 20,227 rubles.

The government plans to raise the monthly minimum wage to 28,935 rubles in 2027. It has also set a target of increasing it to 35,000 rubles by 2030. A higher minimum wage could directly benefit lower-paid workers and support domestic demand. For workers’ purchasing power to improve, however, wage growth must outpace inflation. Businesses must also be able to absorb higher labour costs while preserving jobs.

According to the government’s projections, household real incomes will rise by 1.4% in 2027. They are expected to grow by an average of 2.5% annually over the following two years. After adjustment for inflation, real income shows changes in household purchasing power. These projections therefore mean creating conditions in which families can afford more goods and services with their incomes than before. Achieving that will require growth not only in social payments, but also in employment, wages and productive investment.

Siluanov said the budget would help contain inflation, expand access to credit for the private sector and create conditions for lower interest rates. The approach is to manage public spending in a planned manner while making room for private investment and production. The budget can help set this direction, but the outcome will also depend on inflation, the availability of credit and investment across the economy.

Siluanov said the non-oil-and-gas budget deficit would be around 5% of gross domestic product, its lowest level since 2008. The government projects that regions’ own budget revenues will reach about 24.7 trillion rubles next year. These targets can be viewed as part of an effort to expand revenue sources beyond the energy sector and strengthen the financial capacity of regional economies.

The draft budget links social assistance, pensions and the minimum wage with fiscal planning. It also seeks to establish a basis for meeting government obligations even if oil and gas revenues decline. Bringing household welfare, diversified revenue sources and long-term economic stability into a single plan is one of its main features.

The income and revenue figures in the budget are projections; their success will be measured by implementation. But the policy direction is clear: sustain social obligations, increase household incomes and strengthen Russia’s own economic resources and capacity to make decisions in pursuit of national priorities. This approach presents the Russian budget as a strategic plan connecting public welfare with economic sovereignty.