Russia is set to significantly increase its defense budget in 2027, earmarking 17.1 trillion rubles (approximately $202.6 billion) according to government budget documents. This marks a 27% hike from the 13.5 trillion rubles initially budgeted, representing the highest level of defense spending since the outbreak of the war in Ukraine in 2022.
Over the next three years, total defense spending is projected to reach 50 trillion rubles. However, the exact amount allocated for defense in 2026 remains classified, with some military expenses recorded under different budget categories.
This substantial increase in defense spending occurs as Russia grapples with an expanding budget deficit. The government has revised its 2026 deficit estimate to 3.2% of GDP, up from a previous projection of 1.6%. Overall budget expenditures are anticipated to climb to 48.6 trillion rubles this year.
To address the growing deficit and increased spending, Russia plans to boost borrowing and introduce new tax measures. A proposed windfall tax on metals and mining companies is expected to generate approximately 200 billion rubles annually.
According to projections, state debt is expected to rise to 21.7% of GDP by 2027, up from 19.9% in 2026. Additionally, total borrowing next year is anticipated to increase to 7.7 trillion rubles.
The draft budget is scheduled for submission to Russia’s parliament by October 1, with defense expenditures remaining a central component of government spending.