Russia is on track to spend record amounts on the war against Ukraine in 2026. Military spending could reach nearly 17 trillion rubles, or about $199 billion – approximately 40% more than originally budgeted. The data comes from Bloomberg, which cites sources familiar with Russian government plans.
Moscow increases spending after talks fail
According to Bloomberg, the decision to increase funding was made by Vladimir Putin at the end of 2025. After talks with the United States in Alaska, the Russian leadership expected the possibility of an agreement to end hostilities. In January, the Kremlin concluded that an agreement with Ukraine was unattainable and that American efforts had not led to a breakthrough.
After this change in assessment, the Russian government began to accelerate advance payments to defense industry enterprises and increase other war-related spending. Thus, the projected budget deficit for 2026 has grown to over 7 trillion rubles, compared to the initially planned 3.8 trillion rubles. Additional financing is provided by increasing domestic borrowing and selling gold.
The military budget will remain high in the coming years
Budget plans foresee Russia allocating 17.1 trillion rubles for military needs in 2027. The amount should decrease to 16.6 trillion rubles in 2028 and to 16.3 trillion rubles in 2029. Bloomberg points out that actual spending in 2027 may also exceed the planned.
“The government is finally budgeting for a prolonged war in Ukraine, but it is still underestimating its cost”, says economist Ekaterina Vlasova.She said it will be difficult to keep nominal defense spending unchanged as the war continues is dragging on, and the production of weapons is becoming more expensive. Vlasova expects that in 2027, spending will again exceed the planned amount, although to a lesser extent, which would leave the budget deficit at about 3% of gross domestic product.
According to analyst at the German Institute for International and Security Affairs Janis Kluge, a significant part of the funds will be directed to the production of weapons. After almost five years of full-scale war, Russian stocks have decreased, and the country must again increase the production of ammunition and other types of weapons.
Moscow plans to maintain the high level of military spending for at least another three years. To cover this financial burden, the government is looking for income from excess profits in the extractive industry, the sale of confiscated assets and an increase in domestic indebtedness.
Sources: unian.net, newsukraine.rbc.ua