Russia is planning a substantial increase in its defense budget for 2027, allocating 17.1 trillion rubles (approximately $202.6 billion), according to government budget documents. This represents a 27% rise from the initially budgeted 13.5 trillion rubles, marking the highest defense spending level since the onset of the war in Ukraine in 2022.
Over the next three years, total defense spending is projected to reach 50 trillion rubles. However, specific spending details for 2026 remain undisclosed, with some military-related expenses categorized under different budget sections. Amid this increase, Russia faces a broader budgetary challenge, with the government raising its 2026 budget deficit estimate to 3.2% of GDP, up from an earlier projection of 1.6%.
To address the growing deficit and increased spending, Russia plans to implement additional borrowing and new tax measures. One significant proposal is a windfall tax on metals and mining companies, expected to generate around 200 billion rubles annually. State debt is anticipated to rise to 21.7% of GDP by 2027, compared to 19.9% in 2026, with total borrowing next year projected to increase to 7.7 trillion rubles.
The draft budget, including these defense spending plans, is set to be submitted to Russia’s parliament by October 1. Defense spending continues to be a major component of the government’s expenditure strategy, reflecting the country’s ongoing priorities amid economic challenges.