Russia’s draft budget raises military spending to 17.1 trillion rubles

Under draft federal budget legislation submitted to the State Duma on September 30, Russian military spending will rise to 17.1 trillion rubles, the Kyiv Post reported¹. The Taipei Times reported that Russia plans to sharply increase defence spending, cut funding for education and raise taxes next year as the costs of the war in Ukraine mount³. The National Security Journal reported that the budget plans Russia’s highest defence spending since the invasion, even as its deficit forecast doubles and state debt rises past a level its excerpt does not specify⁴.

The Japan Times reported that the spending plans show President Putin preparing for years of war, and that much of the additional military spending is likely to flow into weapons². The Post Guam account described Moscow abandoning plans to rein in military outlays⁷.

Why it matters to investors

The financing is coming partly from Russian companies and their owners. The Kyiv Post reported that Russian billionaires are funding about 1% of the state budget through a voluntary war levy¹. The Caspian Post put the figure at $5.6 billion; Vietnam.vn reported that Russia expects to collect $5.7 billion from corporate contributions^5,6. The two accounts of the same levy differ by a tenth of a billion dollars, and neither excerpt explains the basis for its number^5,6.

The deficit is widening around that contribution. The Caspian Post reported that Russia’s 2026 budget deficit is now projected at 3.2% of GDP, or 7.3 trillion rubles, which it converted to $87 billion, against an initial target of 1.6% of GDP⁵. Vietnam.vn reported that the deficit reached nearly 6 trillion rubles in March⁶. The Japan Times framed the fiscal task as covering the deficit and rebuilding reserves depleted during the war².

What to watch

The composition of the budget is the signal, not the headline total. The Taipei Times reported defence rising while education falls and taxes rise, which is the trade-off a government makes when it expects the war to continue rather than end³. The Japan Times reached the same conclusion from the same document².

The second marker is the gap between what Moscow says and what it funds. The National Security Journal framed its report as a comparison between Putin’s stated interest in a negotiated peace and a defence budget that is the largest since the invasion⁴. The Post Guam account notes the abandonment of plans to restrain military spending⁷. On the levy, watch whether the voluntary contribution from billionaires is repeated, and at what size, given that the two figures reported for it already disagree^1,5,6.