Russia increases military spending through cuts to social services

Russia is significantly increasing its military expenditures for 2027, signaling a continued commitment to the conflict in Ukraine. The federal budget proposal seeks to allocate 17.1 trillion rubles to defense, a 27 percent increase from the previously intended 13.5 trillion rubles. To fund this surge, the government plans to reduce spending in sectors such as healthcare, education, infrastructure, and social policy, while also implementing tax increases.

At the regional level, St. Petersburg is implementing similar budgetary shifts. Draft amendments to the city’s 2026 budget involve cutting approximately 70 billion rubles from essential services. Reductions are targeted at education (13 billion rubles), healthcare (8.5 billion rubles), and construction for schools and hospitals (15 billion rubles). Funding for civil defense shelters and housing for orphans is also being reduced.

Conversely, these funds are being redirected toward the military. St. Petersburg is increasing payments to participants in the war and their families by 6.4 billion rubles, alongside subsidies for public sector wages and subsidized medicines.