Russia has allocated 17.1 trillion roubles to national defence in its draft budget for 2027, around 35 per cent of all federal government spending, while planning a real terms reduction in overall spending, according to the latest Defence Intelligence update on the war in Ukraine.
The assessment, published on Friday, said: “Russia’s spending plans for 2027 almost certainly represent a real-terms reduction compared to 2026. But military spending is set to increase. On 30 September 2026, the Russian government submitted its proposed 2027 budget to the Duma (the lower house of the state legislature). Compared with updated expected spending for 2026, the plan forecasts a nominal spending increase of 0.5 per cent, well short of inflation, which the Bank of Russia estimates at 6.3 per cent. Spending on education, healthcare, and social policy are all highly likely set to decrease by between 6 and 7 per cent compared to 2026 in nominal terms.”
“The draft 2027 budget allocates 17.1 trillion rubles (USD $202.6 bn) towards national defence, which is around 35 per cent of total federal government spending. This is a 40 per cent increase compared to what was initially planned in 2026. However, Russia will almost certainly overspend on defence by at least 4-5 trillion rubles (USD $47-59 bn) in 2026 (included in updated 2026 total spending plans). As a result, the actual increase in defence spending will almost certainly not be as high as 40 per cent.”
“The 2027 budget forecasts that the budget will be less reliant on oil revenues than in previous years. Oil revenues are forecast to amount to 16 per cent of total federal revenues in 2027 compared with 22 per cent in 2026. This change is down to a reduction in the oil-price threshold at which Russia saves additional revenues into its National Wealth fund: USD $50 per barrel in 2027 down from USD $59 per barrel in 2026.”
Defence Intelligence writes its assessments against a published probability yardstick, in which “almost certainly” carries a 95 per cent or greater likelihood and “highly likely” sits between 80 and 90 per cent.
