Russia is planning a substantial increase in its defense budget for 2027, with government documents revealing an allocation of 17.1 trillion rubles, equivalent to approximately $202.6 billion. This figure marks a 27% rise from the initially budgeted 13.5 trillion rubles and represents the highest level of defense expenditure since the onset of the Ukraine war in 2022.
Over the next three years, Russia’s total defense spending is projected to reach 50 trillion rubles. Despite this significant budget allocation, the actual defense spending for 2026 remains undisclosed, as some military-related expenditures are categorized under different budget items.
The decision to boost defense spending comes amid a widening budget deficit, with the Russian government revising its 2026 deficit estimate to 3.2% of GDP, up from a previous forecast of 1.6%. Overall government spending is expected to increase to 48.6 trillion rubles this year.
To finance the growing deficit and increased spending, Russia plans to engage in additional borrowing and implement new tax measures. A proposed windfall tax on metals and mining companies is anticipated to generate approximately 200 billion rubles annually.
State debt is projected to rise to 21.7% of GDP by 2027, up from 19.9% in 2026, with total borrowing next year expected to reach 7.7 trillion rubles. The draft budget, which includes defense spending as a key component, is scheduled to be submitted to Russia’s parliament by October 1.
