Russia is set to significantly boost its defense budget, planning to allocate 17.1 trillion rubles (approximately $202.6 billion) for defense expenditures in 2027, as per recently released government budget documents. This proposed spending represents a 27% increase from the previously budgeted 13.5 trillion rubles and marks the highest level of defense expenditure since the onset of the war in Ukraine in 2022.
Over the next three years, Russia’s total defense spending is anticipated to reach 50 trillion rubles. However, the exact defense expenditure for 2026 remains undisclosed, with some military-related costs being categorized under different budget headings. This increase in defense spending comes amid a broader fiscal strain, as Russia is confronted with a growing budget deficit. The government has revised its deficit projection for 2026 to 3.2% of GDP, up from an earlier forecast of 1.6%.
Overall budget spending is expected to climb to 48.6 trillion rubles this year. To manage the rising deficit and escalating expenditures, Russia plans to increase borrowing and implement new tax measures. Notably, a proposed windfall tax on metals and mining companies is projected to generate approximately 200 billion rubles annually.
The country’s state debt is forecasted to rise to 21.7% of GDP by 2027, compared to 19.9% in 2026, with total borrowing next year estimated to reach 7.7 trillion rubles. The draft budget, emphasizing defense as a significant component of government spending, is expected to be presented to Russia’s parliament by October 1.