Date: September 29, 2026
Reporter: Emilly Jordan
Russia plans to increase its defence spending by about 27% in 2027, allocating 17.1 trillion roubles ($202.6 billion) to the military, according to Russian government budget documents reviewed by Reuters. The planned spending would be the highest level since Russia launched its full-scale invasion of Ukraine in 2022.
The proposed 17.1 trillion roubles compares with 13.5 trillion roubles originally budgeted for defence in 2027. Over the next three years, total defence spending is projected to reach about 50 trillion roubles, the documents show.
Russia had originally planned to spend 12.1 trillion roubles on defence in 2026, although the actual amount spent this year is classified and will not be disclosed. Some military-related expenditures may also be recorded under other sections of the federal budget, making the overall cost of defence-related activity difficult to determine from the headline defence figure alone.
The increase in military spending comes as Russia faces growing pressure on its public finances. The government has raised its estimate for the 2026 budget deficit to 3.2% of gross domestic product, compared with an earlier forecast of 1.6%. Total government spending in 2026 is expected to rise by 13.2% to 48.6 trillion roubles, equivalent to about 20.9% of GDP.
The government is also planning to rely more heavily on borrowing. Russia intends to increase its 2026 net borrowing by 26% to 5 trillion roubles and use 459 billion roubles from the liquid portion of its National Wealth Fund to help cover the deficit. The planned withdrawal represents about 11% of the fund's liquid resources, according to the documents.
At the same time, Russia has reduced its forecast for oil and gas revenues in 2026 to 7.6 trillion roubles from an earlier estimate of 8.9 trillion roubles. Energy revenues remain an important source of government income, making changes in oil and gas receipts significant for the country's fiscal position.
The government has also announced plans for new tax measures in 2027 to help finance the widening deficit. The documents indicate that a new windfall tax on metals and mining companies is expected to raise approximately 200 billion roubles annually.
Despite the additional tax revenue, Russia's borrowing requirements are projected to increase further next year. Total borrowing in 2027 is expected to rise by 43% to 7.7 trillion roubles, while state debt is projected to increase to 21.7% of GDP from 19.9% in 2026. That would put government debt above the 20% level previously identified by Russian authorities as a safe threshold.
The spending plans indicate that Russia is continuing to devote substantial government resources to defence while its war with Ukraine continues. The documents do not, however, provide a breakdown showing exactly how the proposed defence allocation would be distributed among personnel, weapons, military production, operations and other areas.
The Russian government is expected to submit its draft budget to parliament by October 1. Parliament will then consider the proposed spending and revenue plans before the final budget is adopted.
The higher defence allocation comes amid continuing military activity in Ukraine and broader efforts by Moscow to maintain its military capabilities. The budget documents provide a picture of planned government spending but do not by themselves establish how long the war will continue or how the additional funds will affect the battlefield.
Reuters reported that the figures were contained in government documents reviewed on September 28. The exchange rate used in the report was approximately 84.41 roubles to the U.S. dollar.
Russia's planned increase therefore combines a higher military allocation with increased borrowing, additional taxes and reduced projected energy revenues, putting the country's fiscal policy under greater pressure as it prepares its budget for 2027.