Russia Raises 2027 Military Spending by 27%, Budget Documents Show

MOSCOW, September 28 - Russia has announced plans to allocate 17.1 trillion roubles ($202.58 billion) towards its defence budget in 2027, a 27% increase from the originally planned 13.5 trillion roubles and the highest figure since the beginning of the war in Ukraine in 2022, according to government documents obtained by Reuters.

Total defence spending is expected to reach 50 trillion roubles over the next three years. In 2026, the government had originally budgeted 12.1 trillion roubles for defence, but the exact amount remains undisclosed as it is classified. The documents also revealed that the government has raised its estimate for the 2026 budget deficit to 3.2% of the gross domestic product (GDP), up from the previously stated 1.6%.

Overall, budget spending in 2026 is set to increase by 13.2% to 48.6 trillion roubles, which represents 20.9% of GDP. The government is anticipated to present the draft budget to parliament by October 1. Earlier this week, the government announced plans for new tax hikes in 2027 to help finance the growing deficit, with a new windfall tax on metals and mining companies expected to generate approximately 200 billion roubles annually.

Moreover, the documents indicate that the government will raise its net borrowing plan by 26% to 5 trillion roubles in 2026, spending 459 billion roubles, or roughly 11% of the National Wealth Fund's liquid portion, to mitigate the deficit. Despite this, state debt is projected to rise to 21.7% of GDP in 2027, up from 19.9% in 2026, surpassing the authorities' deemed safe threshold of 20%.

Additionally, the documents show that total borrowing in 2027 will increase by 43% to 7.7 trillion roubles.