Russia's Military Expenditure Swells to 46% of Federal Budget

In the first quarter of 2026, Russia’s defence spending reached 5.9 trillion rubles (about €70.4 billion), accounting for 46 % of the total federal outlays of 12.8 trillion rubles. This marks a 30 % increase from the same period in 2025, when spending was 4.5 trillion rubles.

Analysts attribute the surge to a 43 % rise in so‑called “secret” expenditures, of which roughly 85 % is directed to the military. The higher war costs have strained the budget: tax revenues fell to 8.3 trillion rubles amid new sanctions, a weaker ruble and a slowing economy, while the deficit is projected at 2.6 % of GDP. The planned 2026 defence budget of 14.9 trillion rubles was originally reduced, but the increase in secret spending has offset that cut.

The Russian finance ministry has expressed growing concern, and the then‑central‑bank governor Elvira Nabiullina is reported to have opposed the mounting war costs. To offset revenue shortfalls, the value‑added tax was raised from 20 % to 22 % on 1 January 2026. The analysis draws on calculations by Janis Kluge of the Stiftung Wissenschaft und Politik, data from SIPRI and reporting by the Moscow Times.