The Russian State Duma approved record military spending amid cuts to healthcare and pension funding

On October 29, the Russian State Duma passed the draft federal budget for 2027–2029 in its first reading. The document calls for increased spending on the military and law enforcement agencies, reduced funding for a number of civilian sectors, and tax increases.

Next year, 17.1 trillion rubles are planned to be allocated to national defense—compared to 12.9 trillion rubles in 2026. 

 This will account for about 35% of the federal budget. An additional 4.6 trillion rubles is earmarked for national security, including funding for the Ministry of Internal Affairs, the Russian Guard, the special services, and the prison system.

At the same time, the draft budget calls for spending cuts in a number of civilian sectors. Funding for healthcare is planned to be reduced by 3%, to 1.81 trillion rubles, and funding for social support for the population, including pension payments, by 6%, to 6.65 trillion rubles. Spending on housing and utilities is set to decrease by 8%, and support for the national economy by 3%.

To replenish the budget, Russian authorities plan to introduce additional taxes on cement and fertilizer producers, as well as gold mining companies. The plan also calls for raising the maximum personal income tax rate on passive income—such as bank deposits—to 22% and introducing a 22% VAT on purchases from foreign online retailers.

According to estimates by the Russian Ministry of Finance, these tax changes are expected to bring in 1.5 trillion rubles to the budget in 2027 and an additional 2.2 trillion rubles in 2028–2029.

In the temporarily occupied territories of Zaporizhzhia Oblast, representatives of the occupation administration have launched a campaign to forcibly collect funds and property for the needs of Russian military units. 

Russia’s gold reserves have been declining for the tenth consecutive month and fell by another 6.2 metric tons in September—to 2,260 metric tons, the lowest level since the end of 2019. This was reported on October 28 by the Foreign Intelligence Service of Ukraine.

The Central Bank of Russia has been reducing its gold reserves for the tenth consecutive month to help cover the state budget deficit. Since December 2025, gold reserves have decreased by approximately 62 metric tons—the largest reduction since the 1998 financial crisis.