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 represents a 27% increase over the previously budgeted 13.5 trillion rubles and marks the highest level of defense spending since the onset of the conflict in Ukraine in 2022.
Over the next three years, Russia’s total defense expenditure is expected to reach 50 trillion rubles. However, specific figures for defense spending in 2026 remain undisclosed, with some military-related expenses reportedly categorized under other budget areas. This increase in defense spending comes amid a growing budget deficit, with the Russian government revising its 2026 deficit estimate to 3.2% of GDP, up from an earlier projection of 1.6%.
To address the expanding deficit and rising expenditures, Russia is planning additional borrowing and the introduction of new tax measures. One such measure includes a proposed windfall tax on metals and mining companies, anticipated to generate about 200 billion rubles annually. The state debt is projected to rise to 21.7% of GDP by 2027, compared to 19.9% in 2026, with total borrowing expected to increase to 7.7 trillion rubles next year.
The draft budget, which underscores defense spending as a primary component of government expenditure, is slated for submission to Russia’s parliament by October 1. These budgetary adjustments reflect Russia’s strategic priorities amid ongoing economic challenges.