Pavel Luzin
The draft proposal of Russia’s federal budget for 2025 and 2026–2027 was submitted to the State Duma on September 30. According to the document, the national defense budget for 2025 would be 13.5 trillion rubles (almost $140 billion). There will additionally be a minor decrease in military spending of 12.8 trillion rubles ($128 billion) in 2026 and 13.1 trillion rubles ($126.6 billion) in 2027 (Sozd.duma.gov.ru, September 30). This is an evident administrative victory of the coalition consisting of the Ministry of Defense (MoD) and the military-industrial complex. Regardless of whether or not the war against Ukraine will end or cease in the foreseeable future, the military budget will not return to the pre-war level of only 3.6 trillion rubles ($48.5 billion), nor the levels from 2022–2023 of 5.5 trillion rubles ($80.3 billion) and 6.4 trillion rubles ($75.2 billion) respectively. Russia’s dramatic increase in military spending indicates that it anticipates the war lasting beyond the next year and perhaps represents preparations to expand its military operations beyond Ukraine.
This victory increases the imbalances in Russia’s domestic economy. Consequently, the authoritarian regime promises to become tougher and more self-isolated, meaning taxpayers will inevitably suffer an additional fiscal and inflationary burden. The remaining profitable assets will be reallocated in favor of Russia’s most loyal groups, families, and people. This will likely lead to discontent among regular Russians, who are already becoming fatigued from the long war (see EDM, November 27, 2023, August 14, September 4).
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