Russia plans to significantly increase its defense budget, with an allocation of 17.1 trillion rubles (approximately $202.6 billion) for the year 2027, as outlined in government budget documents. This marks a 27% increase from the previously budgeted 13.5 trillion rubles and represents the highest level of defense spending since the onset of the Ukraine conflict in 2022.
Over the next three years, Russia’s total defense spending is expected to reach 50 trillion rubles. However, the exact amount allocated for defense in 2026 remains classified, and certain military-related expenditures are being recorded under different budget categories.
The substantial increase in defense spending comes amid a broader budget deficit for Russia. The government has revised its deficit projection for 2026 to 3.2% of GDP, up from an earlier estimate of 1.6%. Overall budgetary spending is anticipated to rise to 48.6 trillion rubles this year.
To address the growing deficit and accommodate increased spending, Russia plans to implement additional borrowing and introduce new tax measures. One such measure is a proposed windfall tax on metals and mining companies, expected to generate around 200 billion rubles annually.
The country’s state debt is anticipated to climb to 21.7% of GDP in 2027, up from 19.9% in 2026. Additionally, total borrowing next year is projected to rise to 7.7 trillion rubles.
The Russian government is expected to submit the draft budget to its parliament by October 1. Defense spending will continue to be a major component of the government’s expenditure plans.
