Russia plans a record 2027 defence budget as its deficit widens

Russia plans to spend a record 17.1 trillion roubles on defence in 2027, according to budget documents^1,4. That is about $201 billion by one calculation⁵, and about $202.6 billion by another⁸. Reports agree the defence budget will exceed $200 billion in 2027^3,5.

Military spending is being raised by 27% for 2027, the highest level of the war so far, according to the budget documents^2,7,9. It is the highest figure since the start of the war in Ukraine in 2022⁷. The government expects to submit the draft budget by 1 October².

TVP World summarised the package as a record 17.1 trillion-rouble defence budget for 2027, accompanied by higher taxes and more borrowing¹. The same budget documents carry the 2026 deficit, reported in one account at a level equivalent to about 280 trillion won².

Why it matters to investors

Moscow is raising taxes and borrowing as its budget deficit widens^1,4. Oil revenues are falling at the same time⁴. The deficit this year is now expected to exceed the roughly 3.2 trillion roubles, around $160 billion, that was initially forecast, and is the highest since the war began^3,5.

The buffers are thinner than they were. Reserves that stood at a higher level in 2022 have shrunk to about 4 trillion roubles, more than halved, and the Russian government is turning to debt to fill the fiscal gap⁶. Russia initially budgeted $143.4 billion for defence under the earlier plan, which shows the scale of the increase now being written into law⁸.

The Defence Blog noted that the deficit for this year is now expected to run wider than planned even as the military line rises⁵. Chosun’s account listed the three levers together: a higher defence figure, an expanded force, and higher taxes and debt to pay for both⁶.

What to watch

Defence spending over the next three years is projected to total about $592.3 billion⁸. Russia is also expanding its armed forces again, with both the budget and the force expansion set at new records^4,10. One description of the shift called it a dramatic surge in military spending and a fresh expansion of the armed forces¹⁰.

Ukrainian coverage read the record budget as confirmation that Moscow has no interest in ending the war⁹. For investors the transmission runs through oil revenues, Russian tax policy and Russian borrowing, all three of which the budget documents move at once^1,4,6.