Russia intends to allocate 17.1 trillion roubles for defense in 2027, marking a 27 percent increase from the initially planned 13.5 trillion roubles. This will be the largest defense budget since the onset of the Ukraine conflict in 2022, recently released government budget documents.
Over the next three years, total defense expenditures are projected to reach 50 trillion roubles. While the 2026 defense budget was initially set at 12.1 trillion roubles, the actual spending figure remains classified and undisclosed. Additionally, some military-related expenses are included in other budget sections.
In a significant development, the government has revised its 2026 budget deficit forecast upward to 3.2 percent of gross domestic product (GDP), doubling the previous estimate of 1.6 percent. Overall budget spending for 2026 is expected to rise by 13.2 percent, reaching 48.6 trillion roubles, which accounts for 20.9 percent of GDP.
The draft budget is scheduled for submission to parliament by October 1. Meanwhile, new tax increases planned for 2027 aim to address the expanding deficit. Notably, a windfall tax on metals and mining companies is projected to generate approximately 200 billion roubles annually.
The documents also reveal that the government will raise its net borrowing target by 26 percent to 5 trillion roubles in 2026. To help reduce the deficit, it plans to utilize 459 billion roubles—around 11 percent of the liquid portion of its National Wealth Fund. Furthermore, the oil and gas revenue forecast for 2026 has been lowered from 8.9 trillion roubles to 7.6 trillion roubles.
State debt is expected to climb to 21.7 percent of GDP in 2027, up from 19.9 percent in 2026, surpassing the 20 percent threshold considered safe by authorities. Total borrowing for 2027 will surge by 43 percent, reaching 7.7 trillion roubles.
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