Russia proposes record defense spending in 2027–2029 draft budget

The Russian government has submitted a draft federal budget for 2027–2029 to the State Duma, prioritizing defense and security needs. Draft documents indicate that military spending, including arms production, is projected to reach 17.1 trillion roubles in 2027. This amount represents approximately 35% of Russia’s total state budget.

To sustain this level of expenditure, the Russian Ministry of Finance has proposed various tax increases, including higher rates on passive income and a 22% value-added tax on cross-border e-commerce. The government expects to run budget deficits of approximately 2% of GDP annually over the next three years, with a combined shortfall of nearly 16 trillion roubles.

The increased focus on military spending comes amid the ongoing conflict in Ukraine and heightened tensions with NATO. Western leaders have expressed concerns regarding Russia’s military capabilities and the potential for hybrid attacks against NATO member states. The budget also aims to address social welfare, healthcare, education, and technological leadership.