Russia military spending rises 30% amid escalating war costs

Russian military spending increased by 30% during the first half of the year, contrary to Moscow's previous intentions to reduce expenditures by 2026. Analysts suggest that earlier budget projections may have been unrealistic goals rather than attainable plans, as the costs associated with the invasion of Ukraine continue to rise annually.

The Russian budget deficit reached 2.8% of GDP in July, while liquidity in the National Wealth Fund fell to 1.6% of GDP. While the current deficit level and overall public debt remain manageable through domestic borrowing, experts warn that rising interest rates and increasing deficits in regional and social funds could create significant long-term fiscal pressure.