Key facts
- Russia plans to spend 17.1 trillion roubles ($202.58 billion) on defense in 2027.
- This represents a 27% increase from the originally budgeted amount for 2027.
- Total defense spending over the next three years is expected to be 50 trillion roubles.
- The government raised its 2026 budget deficit estimate to 3.2% of GDP.
- State debt is projected to reach 21.7% of GDP in 2027.
Russia plans to significantly increase its defense spending in 2027, allocating 17.1 trillion roubles ($202.58 billion) for military expenditures, a 27% rise from the initial budget, according to government documents obtained by Reuters. This figure marks the highest defense spending since the start of the war in Ukraine in 2022. Over the next three years, total defense outlays are projected to reach 50 trillion roubles.
The government has also revised its fiscal outlook, raising the estimated budget deficit for 2026 to 3.2% of gross domestic product, up from a previous estimate of 1.6%. Total spending in 2026 is expected to increase by 13.2% to 48.6 trillion roubles, representing 20.9% of GDP. To finance the growing deficit, the government is reportedly planning new tax hikes in 2027, including a windfall tax on metals and mining companies expected to generate approximately 200 billion roubles annually.
Further adjustments include an increase in the net borrowing plan for 2026 by 26% to 5 trillion roubles, with 459 billion roubles from the National Wealth Fund to be used for deficit reduction. The revenue estimate for oil and gas in 2026 has been lowered to 7.6 trillion roubles from 8.9 trillion roubles. State debt is anticipated to climb to 21.7% of GDP in 2027, exceeding the 20% level considered safe by authorities, with total borrowing in 2027 set to rise by 43% to 7.7 trillion roubles.