Russia is set to significantly increase its defense spending, with plans to allocate 17.1 trillion rubles (approximately $202.6 billion) for defense in 2027. This figure, outlined in government budget documents, marks a 27% increase from the initially budgeted 13.5 trillion rubles, representing the highest level of defense spending since the onset of the war in Ukraine in 2022.
Over the next three years, total defense spending is projected to reach 50 trillion rubles. However, the exact amount allocated for defense in 2026 remains classified, with some military expenses categorized under different budget sections. This surge in defense funding comes as Russia grapples with a widening budget deficit, which the government now estimates will be 3.2% of GDP in 2026, up from an earlier projection of 1.6%. Total government spending is expected to increase to 48.6 trillion rubles this year.
To address the growing deficit and accommodate the increase in spending, Russia plans to engage in additional borrowing and implement new tax measures. Notably, a proposed windfall tax on metals and mining companies is anticipated to generate around 200 billion rubles annually. Additionally, state debt is forecasted to rise to 21.7% of GDP by 2027 from 19.9% in 2026, with total borrowing next year expected to reach 7.7 trillion rubles.
The draft budget, which places a significant emphasis on defense expenditure, is expected to be submitted to Russia’s parliament by October 1. This budget proposal highlights the strategic priority Russia places on its military capabilities amid ongoing geopolitical tensions.
