Russia Plans Record 17.1 Trillion-Ruble Defense Budget as War Costs Deepen Fiscal Strain
Russia plans to spend a record 17.1 trillion rubles on defense in 2027, or 35% of total expenditures. Moscow will rely on higher taxes and borrowing to fund the military as oil revenues fall and the budget deficit widens.
Moscow is set to allocate a record-breaking 17.1 trillion rubles ($202.6 billion) for defense in 2027, a 27% increase from previous projections. This marks the highest military spending in post-Soviet history, accounting for nearly 35% of the nation's total federal expenditures. The draft three-year budget expects defense spending to remain high at 16.6 trillion rubles ($186.1 billion) in 2028 and 16.3 trillion rubles ($172.6 billion) in 2029.
Combined with the "National Security" category, security and defense spending will make up 43.9% of total spending in 2027. The increase in defense budget is driven by Russia's growing financial strain, with an expected budget deficit of 3.2% of GDP in 2026, up from an earlier estimate of 1.6%. The Finance Ministry has also revised downward its forecast for oil and gas revenues to 7.6 trillion rubles ($85.2 billion) in 2026, down from 8.9 trillion rubles ($94.2 billion) previously.
To finance the growing deficit, Russia plans to increase borrowing, with net borrowing projected to reach 7.7 trillion rubles ($86.3 billion) in 2027, a 43% increase. State debt is also expected to surpass the 20% GDP threshold, with government debt rising to 21.7% of GDP in 2027. The government is also exploring new tax measures, including a windfall tax on mining, metals, and gold-mining companies, which could generate around 200 billion rubles ($2.1 billion) annually.
Written by urgent.news from Kyiv Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
