Russia raises 2027 military spending by 27pc, budget documents show

Russia plans to spend 17.1 trillion roubles on defence in 2027, around 27 per cent more than the 13.5 trillion roubles originally budgeted and the highest figure since the start of the war in Ukraine in 2022, government documents seen by Reuters showed on Monday.

Total defence spending will amount to 50 trillion roubles in the next three years, according to the documents. In 2026 the government planned to spend 12.1 trillion roubles on defence but the actual amount is classified and will not be disclosed. Some military spending can also be accounted for in other parts of the budget.

The documents also showed the government raised its estimate for its 2026 budget deficit to 3.2 per cent of gross domestic product, from 1.6 per cent of GDP previously. Budget spending in 2026 will increase by 13.2 per cent to 48.6 trillion roubles or 20.9 per cent of GDP.

The government is expected to submit the draft budget to parliament by October 1. Last week, it announced plans for new tax hikes in 2027 to finance the growing deficit. The documents showed that a new windfall tax on metals and mining companies was expected to raise about 200 billion roubles annually.

The documents showed that in 2026 the government will increase its net borrowing plan by 26 per cent to 5 trillion roubles and spend 459 billion roubles – about 11 per cent of the liquid part of its National Wealth Fund – to reduce the deficit. It also cut the oil and gas revenue estimate for 2026 to 7.6 trillion roubles from 8.9 trillion roubles previously.

The documents showed that state debt is set to rise to 21.7 per cent of GDP in 2027 from 19.9 per cent of GDP in 2026, above the 20 per cent level seen by the authorities as safe. Total borrowing in 2027 will increase by 43 per cent to 7.7 trillion roubles.