- Russia plans to spend 17.1 trillion rubles ($202.58 billion) on defense in 2027, around 27% more than the 13.5 trillion rubles originally budgeted and the highest figure since the start of the war in Ukraine in 2022, government documents seen by Reuters showed on Monday.
- Total defense spending will amount to 50 trillion rubles in the next three years, according to the documents.
- The government raised its estimate for its 2026 budget deficit to 3.2% of gross domestic product, from 1.6% of GDP previously.
- The government announced plans for new tax hikes in 2027 to finance the growing deficit.
- The government is expected to submit the draft budget to parliament by October 1.
- In 2026, the government planned to spend 12.1 trillion rubles on defense but the actual amount is classified and will not be disclosed.
- Budget spending in 2026 will increase by 13.2% to 48.6 trillion rubles or 20.9% of GDP.
- The documents showed that state debt is set to rise to 21.7% of GDP in 2027 from 19.9% of GDP in 2026, above the 20% level seen by the authorities as safe.
Russia's military spending is set to rise significantly, with a planned budget of 17.1 trillion rubles ($202.58 billion) for 2027, marking a 27% increase from previous estimates.1
This figure represents the highest military expenditure since the onset of the Ukraine conflict in 2022.
The total defense spending over the next three years is projected to reach 50 trillion rubles, as outlined in government documents reviewed by Reuters.2
In 2026, the government had initially planned to allocate 12.1 trillion rubles for defense, but the actual amount remains classified.6
Additionally, the government has revised its budget deficit estimate for 2026 to 3.2% of GDP, up from 1.6% previously, indicating a growing fiscal challenge.3
Budget spending for 2026 is expected to increase by 13.2% to 48.6 trillion rubles, which constitutes 20.9% of GDP.7
To address the rising deficit, the government plans to introduce new tax hikes in 2027, including a windfall tax on metals and mining companies expected to generate 200 billion rubles annually.4
Furthermore, state debt is projected to rise to 21.7% of GDP in 2027, surpassing the 20% threshold deemed safe by authorities.8
Total borrowing for 2027 is anticipated to increase by 43% to 7.7 trillion rubles.
“The increase pushes defense spending to 17.1 trillion rubles ($202.58 billion), with total defense outlays of 50 trillion rubles over three years. The government also raised its 2026 budget deficit estimate to 3.2% of GDP and plans new tax hikes in 2027 to finance the shortfall.”
The Moscow Times
