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 budget represents a 27% increase from the previously budgeted 13.5 trillion rubles and marks the highest defense expenditure 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. The actual defense expenditure for 2026 remains undisclosed, with some military-related expenses being categorized under different budget segments.
This increase in defense spending comes amidst a widening budget deficit for Russia. The government has revised its 2026 deficit estimate to 3.2% of GDP, up from an earlier forecast of 1.6%. Overall budget expenditures are projected to climb to 48.6 trillion rubles this year.
To manage the growing deficit and rising expenses, the Russian government 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 approximately 200 billion rubles annually.
Russia’s state debt is anticipated to rise to 21.7% of GDP by 2027, increasing from 19.9% in 2026. Additionally, total borrowing for the next year is expected to escalate to 7.7 trillion rubles.
The draft budget, highlighting defense as a major component of government expenditure, is scheduled to be presented to Russia’s parliament by October 1.