Russia will increase its defense spending in 2027 to a record level since the beginning of the war in Ukraine

Russia plans to allocate 17.1 trillion rubles, equivalent to $202.58 billion, for defense in 2027, according to government documents reviewed by Reuters. The amount would be approximately 27% higher than the initial budget planned for 2026 and the highest since the beginning of Russia’s invasion of Ukraine in 2022.

The documents indicate total defense spending of approximately 50 trillion rubles over the next three years. For 2026, the Russian government has officially planned 12.1 trillion rubles for this area, although the actual figure is classified. Some military spending could be included under other budget categories.

Meanwhile, Moscow has raised its estimate for the 2026 budget deficit to 3.2% of GDP, up from 1.6% previously. Budget spending is expected to increase to 48.6 trillion rubles, while oil and gas revenues have been revised down to 7.6 trillion rubles.

To cover the deficit, Russia plans to increase net borrowing and use 459 billion rubles from the National Wealth Fund. The government is also preparing further tax increases for 2027. State debt is estimated to reach 21.7% of GDP in 2027, above the 20% threshold considered safe by Russian authorities. The draft budget is expected to be submitted to parliament by October 1.