Exclusive-Russia raises 2027 military spending by 27%, budget documents show

Russia Increases 2027 Military Budget by 27%, Highest Since Ukraine War Began

Key Details on Russia's Increased Military Spending and Fiscal Plans

By Darya Korsunskaya

Record Defence Budget for 2027

MOSCOW, Sept 28 - Russia plans to spend 17.1 trillion roubles ($202.58 billion) on defence in 2027, around 27% more than the 13.5 trillion roubles originally budgeted and the highest figure since the start of the war in Ukraine in 2022, government documents seen by Reuters showed on Monday. 

Three-Year Defence Spending Outlook

Total defence spending will amount to 50 trillion roubles in the next three years, according to the documents. In 2026 the government planned to spend 12.1 trillion roubles on defence but the actual amount is classified and will not be disclosed. Some military spending can also be accounted for in other parts of the budget.  

Budget Deficit and Spending Increases

The documents also showed the government raised its estimate for its 2026 budget deficit to 3.2% of gross domestic product, from 1.6% of GDP previously. Budget spending in 2026 will increase by 13.2% to 48.6 trillion roubles or 20.9% of GDP.

Tax Hikes and Revenue Measures

The government is expected to submit the draft budget to parliament by October 1. Last week, it announced plans for new tax hikes in 2027 to finance the growing deficit. The documents showed that a new windfall tax on metals and mining companies was expected to raise about 200 billion roubles annually.  

Borrowing and National Wealth Fund Usage

The documents showed that in 2026 the government will increase its net borrowing plan by 26% to 5 trillion roubles and spend  459 billion roubles - about 11% of the liquid part of its National Wealth Fund - to reduce the deficit. It also cut the oil and gas revenue estimate for 2026 to 7.6 trillion roubles from 8.9 trillion roubles previously. 

State Debt Projections

Debt-to-GDP Ratio and Borrowing Plans

The documents showed that state debt is set to rise to 21.7% of GDP in 2027 from 19.9% of GDP in 2026, above the 20% level seen by the authorities as safe. Total borrowing in 2027 will increase by 43% to 7.7 trillion roubles.  

($1 = 84.4113 roubles)

(Reporting by Darya Korsunskaya; Writing by Gleb Bryanski; Editing by Andrew Heavens and Jon Boyle)