New government budget documents indicate Russia intends to raise defense spending to 17.1 trillion rubles in 2027.

Russian government documents reveal plans to increase military spending by 27% in 2027, reaching a total of 17.1 trillion rubles. This figure represents a 3.6 trillion ruble increase over the 13.5 trillion rubles previously allocated for that year in the 2025 budget. Over the next three years, total defense spending is projected to reach 50 trillion rubles.

Budget Deficits and Borrowing

The government has revised its 2026 budget deficit estimate to 3.2% of GDP, up from a previous projection of 1.6%. To manage this, officials plan to increase net borrowing by 26% to 5 trillion rubles in 2026 and utilize 459 billion rubles from the National Wealth Fund. Total borrowing is expected to rise further in 2027, increasing by 43% to 7.7 trillion rubles.

Revenue and Debt Projections

State debt is projected to climb to 21.7% of GDP by 2027, surpassing the 20% threshold authorities previously considered safe. To address the growing deficit, the government has announced plans for tax hikes in 2027, including a new windfall tax on mining and metals companies expected to generate 200 billion rubles annually. Additionally, the government has lowered its 2026 oil and gas revenue estimate from 8.9 trillion rubles to 7.6 trillion rubles.