Russia is set to significantly boost its defense budget, planning to allocate 17.1 trillion rubles (approximately $202.6 billion) for defense spending in 2027, according to government budget documents. This proposed amount marks a 27% increase over the initially planned 13.5 trillion rubles and represents the highest defense spending level since the onset of the war in Ukraine in 2022.
Over the next three years, Russia’s total defense expenditure is expected to accumulate to 50 trillion rubles. However, details of the actual defense spending for 2026 remain classified, with certain military expenditures reportedly categorized under other budget sections. This substantial increase in defense funding comes amid a wider budget deficit facing the country.
The Russian government has adjusted its 2026 budget deficit forecast to 3.2% of GDP, up from the previous estimate of 1.6%. Overall budget expenditures are anticipated to rise to 48.6 trillion rubles this year. To address the growing deficit and increased expenditure, Russia plans to implement additional borrowing measures and introduce new tax initiatives. A proposed windfall tax on metals and mining companies is expected to generate approximately 200 billion rubles annually.
In terms of state debt, projections indicate an increase to 21.7% of GDP by 2027, compared to 19.9% in 2026. Total borrowing for the next year is expected to escalate to 7.7 trillion rubles. The draft budget, which prominently features defense spending, is slated for submission to Russia’s parliament by October 1, highlighting defense as a major component of the government’s financial strategy.