Russia is set to significantly increase its defense spending, with plans to allocate 17.1 trillion rubles (approximately $202.6 billion) for defense in 2027, according to government budget documents. This proposed budget represents a 27% increase from the previously planned 13.5 trillion rubles and marks the highest level of defense expenditure since the onset of the war in Ukraine 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 some military-related expenditures are categorized under different budgetary headings.
This increase in defense spending comes amid a widening budget deficit for Russia. The government has revised its deficit estimate for 2026 to 3.2% of GDP, up from an earlier forecast of 1.6%. Overall government spending is projected to rise to 48.6 trillion rubles this year.
To address the growing deficit and increased spending, Russia plans to implement additional borrowing and introduce new tax measures. A proposed windfall tax on metals and mining companies is expected to generate around 200 billion rubles annually.
Russia’s state debt is anticipated to rise to 21.7% of GDP in 2027 from 19.9% in 2026, and total borrowing for the next year is expected to increase to 7.7 trillion rubles. The draft budget, which retains defense spending as a key component of government expenditure, is scheduled to be submitted to Russia’s parliament by October 1.