Russia hikes war budget by 27% to record level as deficit widens
Russia plans to spend a record 17.1 trillion rubles on defense in 2027, expanding its army further while raising taxes and borrowing to cover a widening budget deficit.
Russia is set to significantly increase its military spending, signaling continued commitment to its war against Ukraine for the foreseeable future. According to available information, Moscow plans to allocate a record 17.1 trillion rubles for defense in 2027 — a 27% increase.
At the same time, Russia is expanding its army once again, pushing troop numbers to a new record. This continues a multi-year trend in which the Kremlin has steadily increased the resources devoted to military needs.
Financial strain
These investments come amid mounting financial pressure. Russia's state budget deficit continues to widen, while revenue from oil exports is falling. To cover the shortfall, the government plans to raise taxes and increase borrowing.
This combination — rising military spending, declining oil revenue and a growing deficit — points to increasing strain on Russian state finances as the war against Ukraine continues. The move to raise taxes and expand borrowing suggests the Kremlin is seeking new ways to fund its military campaign despite the economic headwinds.
The decision indicates that Russia's leadership is not prepared to scale back military spending, even if it means a heavier burden on the state budget and the population going forward.
