Russia plans record defense spending in 2027 — Reuters

Russia preparing for record military spending

Russia plans to allocate RUB 17.1 trillion rubles, or about $202.6 billion, to defense in 2027. This is approximately 27% more than the amount originally provided for in the budget.

According to Reuters, this figure will be the highest since the start of the full-scale war against Ukraine in 2022.

In total, the Russian government intends to spend about RUB 50 trillion on defense over the next three years.

However, the exact amount of military spending in 2026 remains classified. Previously, RUB 12.1 trillion had been earmarked for defense.

Budget deficit growing

At the same time, the Russian government has revised its budget deficit forecast for 2026. It is now estimated at 3.2% of GDP, up from 1.6% previously. Total budget expenditures are expected to increase by 13.2% and reach RUB 48.6 trillion.

To cover the deficit, the government intends to increase net borrowing in 2026 to RUB 5 trillion and to use RUB 459 billion from the National Welfare Fund. The forecast for oil and gas revenues has been lowered from RUB 8.9 to 7.6 trillion.

Debt will continue to grow

In 2027, Russia's national debt could reach 21.7% of GDP, up from 19.9% a year earlier. Borrowing is projected to increase by 43% to RUB 7.7 trillion.

To replenish the budget, Russian authorities are also preparing tax increases for 2027. In particular, a new tax on windfall profits from metallurgical and mining companies is expected to generate about RUB 200 billion annually.

In 2027, Ukraine could allocate up to $175 billion to the defense sector, although the draft state budget currently calls for USD 100 billion. At the same time, the Ministry of Finance of Ukraine has already increased the funding earmarked for defense by UAH 518 billion.