Russia’s 2027 budget plan projects defense spending of 17.1 trillion rubles. This represents an increase of approximately 27 percent compared with the previously budgeted 13.5 trillion rubles.
If implemented, this amount will be the largest allocation for defense since the war in Ukraine began in 2022. The documents project total defense spending of 50 trillion rubles over the next three years.
2026 budget deficit widens
The government had planned defense spending of 12.1 trillion rubles for 2026. However, the final defense expenditure for the year will not be disclosed, and some military spending may be recorded under other budget items.
The 2026 budget deficit forecast was raised from 1.6 percent to 3.2 percent of gross domestic product. Total budget spending is expected to increase by 13.2 percent that year to 48.6 trillion rubles, equivalent to 20.9 percent of gross domestic product.
Tax increases and new borrowing
The government is expected to submit its draft budget to parliament by October 1. New tax increases are planned for 2027 to finance the widening deficit.
An additional tax planned for metal and mining companies is expected to generate approximately 200 billion rubles in annual revenue. The government also plans to increase its 2026 net borrowing target by 26 percent to 5 trillion rubles.
To limit the deficit, 459 billion rubles, or approximately 11 percent of the liquid portion of the National Wealth Fund, will be used. The 2026 forecast for oil and natural gas revenues was also cut from 8.9 trillion rubles to 7.6 trillion rubles.
Public debt expected to reach 21.7 percent
Russia’s public debt is expected to rise to 19.9 percent of gross domestic product in 2026 and 21.7 percent in 2027. This means the debt ratio is projected to exceed the 20 percent level that officials consider safe.
Total borrowing in 2027 is also planned to increase by 43 percent to 7.7 trillion rubles.
