Russia’s defense budget for 2026 has been set at 12.9 trillion rubles (approximately $152.82 billion), with plans to increase it to 17.1 trillion rubles, marking an increase of about 32%. Compared to the previous budget plan for 2027, which accounted for 13.5 trillion rubles ($159.93 billion), this represents a 27% rise.
Over the period from 2027 to 2029, Russia intends to allocate a total of 50 trillion rubles (about $592.34 billion) for defense expenditures.
The government also forecasts that the budget deficit for 2026 will increase to 3.2% of GDP, up from the previously expected 1.6%. The draft budget is to be submitted to the parliament by October 1.
Meanwhile, reports from The Moscow Times indicate that the “military engine” of the Russian economy is beginning to slow down. According to Rosstat, three primary sectors tied to military production saw output grow by 1.9 to 2.1 times between 2023 and 2025. However, the Ministry of Economic Development predicts a significant slowdown in growth rates for these sectors from 2027 to 2029.
The production of other transportation equipment, including drones, is expected to grow at the fastest rate: following a 33.9% increase in 2025, the growth is projected to be 22.4% in 2026, 14.4% in 2027, and 8.9% in 2029.
Economist and former Deputy Minister of Finance Sergey Alexashenko, analyzing the Ministry of Economic Development’s forecast, concluded that “there are no free capacities left in the Russian defense industry.” The Moscow Times also noted that the sharp rise in military expenditures has been a major factor in Russia’s economic growth in recent years.
