Russia is set to significantly ramp up its defense spending, allocating 17.1 trillion rubles (approximately $202.6 billion) for the year 2027. According to government budget documents, this represents a 27% increase compared to the 13.5 trillion rubles previously planned, marking the highest level of defense expenditure since the onset of the conflict in Ukraine in 2022.
Over the next three years, Russia’s total defense spending is projected to reach 50 trillion rubles. However, specific details on the actual defense spending for 2026 remain classified, and certain military-related expenses are reportedly categorized under other budget sections.
The increased defense budget comes amid a broader fiscal challenge, with Russia facing an expanding budget deficit. The government has revised its deficit estimate for 2026 to 3.2% of GDP, up from an earlier forecast of 1.6%. This year, overall budget expenditure is expected to rise to 48.6 trillion rubles.
To address the growing deficit and increased spending, Russia plans to implement additional borrowing and introduce new tax measures. Notably, a proposed windfall tax on metals and mining companies is anticipated to generate approximately 200 billion rubles annually.
In terms of state debt, projections indicate an increase to 21.7% of GDP by 2027, up from 19.9% in 2026. Next year, total borrowing is expected to climb to 7.7 trillion rubles. The draft budget, which highlights defense as a primary government expenditure, is scheduled to be submitted to Russia’s parliament by October 1.