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[BUSINESS] · Russia · 10 sources

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Russia to increase 2027 defense spending to record 17.1 trillion rubles

Leaked Russian government documents reveal a significant escalation in military spending. Russia plans to allocate 17.1 trillion rubles (approximately $202.6 billion) to defense in 2027, marking a 27 percent increase from the 13.5 trillion rubles originally planned for that year. This represents the highest annual defense expenditure since the full-scale invasion of Ukraine began in 2022.

Over the next three years, total defense spending is projected to reach 50 trillion rubles. To fund this surge, the Kremlin is implementing a war economy strategy that includes increasing national debt and introducing new taxes. Specifically, a proposed windfall tax on mining and metallurgical companies is expected to generate roughly 200 billion rubles annually.

The shift toward high military spending is placing severe pressure on Russia's public finances. The government has doubled its budget deficit forecast for 2026, raising it from 1.6 percent to 3.2 percent of GDP. To manage the deficit, Moscow plans to increase net borrowing by 26 percent to 5 trillion rubles in 2026 and will draw 459 billion rubles from the liquid portion of the National Wealth Fund. Consequently, public debt is expected to rise from 19.9 percent of GDP in 2026 to 21.7 percent in 2027, surpassing the 20 percent threshold previously considered safe by authorities.

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Duma · Kremlin · National Wealth Fund · Reuters · Russia · Sberbank · United Russia · Vladimir Putin

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