Russia's military spending will remain at record levels for at least another three years - Bloomberg

Russia plans to keep military spending near record levels at least until 2029, abandoning previous intentions to gradually reduce the burden on the budget. The new three-year plan provides for more than 16 trillion rubles on defense annually even against the backdrop of a growing deficit and state debt.

This is reported by Bloomberg, analyzing the draft federal budget of Russia for 2027-2029.

In 2027, Moscow plans to allocate 17.1 trillion rubles (about $205 billion) for national defense. This is more than 40% higher than the amount planned for 2026, although the actual current military expenditures are not disclosed by the Russian authorities.

After that, no sharp reduction in financing is foreseen: for 2028, the draft provides for about 16.6 trillion rubles, and for 2029, 16.3 trillion rubles. Thus, over three years, Russia plans to spend about 50 trillion rubles solely under the "national defense" item.

In 2027, defense will absorb approximately 35% of all federal expenditures of the Russian Federation. If spending on national security, police, and special services is added, the total will reach about 21.4 trillion rubles, approximately 44% of all budget expenditures.

For comparison, in 2021, before the full-scale invasion of Ukraine, Russia spent about 3.6 trillion rubles on national defense. Therefore, the planned level for 2027 is almost five times higher.

Bloomberg views this trajectory as a sign that the Russian authorities are forming the budget with the expectation of maintaining high intensity of military spending for a long time. At the same time, the budget itself is not evidence of specific plans regarding the duration of the war but only shows the Kremlin's financial priorities for the coming years.

The growth of defense spending increases pressure on Russia's state finances. The Russian government has already raised the budget deficit forecast for 2026 from 1.6% to 3.2% of GDP. For 2027, the deficit is planned at about 2.2% of GDP.

Simultaneously, Moscow plans to borrow more actively. According to budget calculations, the state debt may grow from 19.9% of GDP in 2026 to 21.7% in 2027. The government also continues to use liquid assets of the National Welfare Fund to cover the funding gap.

Part of the additional financing, according to analysts, will go to replenishing ammunition stocks and increasing production of missiles and drones. After almost five years of war, a significant portion of Russia's weapons and ammunition must be produced for current use, not just taken from old stockpiles.

At the same time, the increase in the military block comes at the expense of a tighter distribution of civilian spending. In the draft for 2027, funding for a number of areas, including the economy, social policy, and healthcare, is below previously planned levels.

Earlier, Kurs Ukrainy reported that Russia sharply revised the previous plan for 2027: instead of about 13.5 trillion rubles for defense, 17.1 trillion rubles are now foreseen.