Russia plans record $200 billion military budget for 2027

Russia plans to spend a record 17.1 trillion rubles ($201 billion) on its military in 2027, while its budget deficit this year is now expected to reach double the government’s earlier forecast, according to government documents seen by Reuters.

The defense figure is about 27% higher than the 13.5 trillion rubles Moscow had previously penciled in for 2027 and the largest since Russia launched its full-scale invasion of Ukraine in 2022, Reuters reported Sept. 28. The documents show total defense spending of about 50 trillion rubles ($592 billion) over the next three years. The government is expected to send the draft budget to parliament by Oct. 1.

For 2026, the government had planned to spend 12.1 trillion rubles on defense, but the actual figure is classified and will not be published. Economist Janis Kluge of the German Institute for International and Security Affairs noted on X that the Finance Ministry had originally intended to cut defense spending slightly this year.

The government now expects the 2026 federal deficit to reach 3.2% of gross domestic product, up from its earlier estimate of 1.6%. Total spending this year is set to rise 13.2% to 48.6 trillion rubles, or 20.9% of GDP, while the forecast for oil and gas revenue, long the backbone of Russia’s budget, was cut to 7.6 trillion rubles from 8.9 trillion.

Kluge said the federal figure does not tell the whole story, because it leaves out Russia’s regional budgets and possibly its social security funds. He estimated the consolidated deficit across all levels of government will be close to 4% of GDP. Regional budgets were slightly in surplus on average as of Aug. 1, he said, but a sharp drop of about 0.7% of GDP is expected at the end of the year, pushing them into deficit.

Moscow plans to cover the gap by borrowing more and dipping into savings. Net borrowing this year will rise 26% to 5 trillion rubles, and the government will take 459 billion rubles, about 11% of the liquid assets in its National Wealth Fund, to reduce the deficit. State debt is projected to climb to 21.7% of GDP in 2027 from 19.9% this year, above the 20% level Russian authorities have described as safe.

The government has also announced tax increases for 2027, including a new windfall tax on metals and mining companies expected to raise about 200 billion rubles a year.

Defense is set to take about 35% of Russia’s total federal spending in 2027, according to figures cited by The Moscow Times and the Kyiv Post. Combined with national security spending, which covers the Interior Ministry, the National Guard and the security services, the total reaches 21.4 trillion rubles, or 43.9% of the budget.