Meeting with the deputies of the 8th convocation of the State Duma, which ended its work on July 27, V. Putin accused the West of igniting a “Russophobia machine,” setting “world records” in sanctions, and emphasized that “no one and never” will be able to “break the Russian people.”
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“Our political system, government institutions are formed on sovereign principles, fully complying with the Constitution of the Russian Federation, and are ready to defend the country, able together with society to resolutely repel any hostile steps,” said V. Putin.
According to him, besides “strengthening the country’s defense,” the budget priority for 2027–2029 must also become “solving priority social problems.”
In the 2026 budget law, the government initially allocated 12.9 trillion rubles (145.5 billion euros) in the “national defense” line. However, the actual military budget will exceed the plan by 4–5 trillion rubles, sources familiar with the situation told Bloomberg in June.
According to them, to cover all war expenses, the Russian Ministry of Finance is preparing restrictions on civilian expenditures and intends to attract an additional 2–3 trillion rubles in debt.
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Actual budget expenditures for the war with Ukraine already reached 5.9 trillion rubles in the first quarter, calculated Janis Kluge, a researcher at the German Institute for International Security Studies, based on Ministry of Finance data. Compared to the same period last year, military and arms production expenses increased by 29.9%, compared to January–March 2024 – by 68.7%, compared to 2023 – by 129%, and compared to the first quarter of 2022 – by 4.6 times.
According to his calculations, since 2022, the war with Ukraine has cost Russian taxpayers 53.079 trillion rubles, or 746.6 billion dollars. This amount equals 28 years of current budget expenditures on healthcare, 30 years of education expenditures, and 100 annual budgets of large regions such as Krasnoyarsk Krai or Sverdlovsk Oblast.
The defense and security priority in the budget forces the authorities to “more selectively evaluate” funding for other areas, says CMASF chief expert Emilis Ablajevas. At the same time, according to him, the ability to replenish the budget by continuously increasing the tax burden is decreasing.
Last year, despite increased profit tax and recycling fees, budget revenues were 3 trillion rubles less than planned, and this year the problems have “intensified,” notes E. Ablajevas. The Ministry of Finance raised VAT to 22%, but in the first half of the year, the deficit reached almost 6 trillion rubles. By the end of the year, the “hole” in the treasury may increase to 7 trillion, the expert predicts.
