Putin signs 2026 state budget prioritizing war
Russian President Vladimir Putin has signed Russia’s federal budget for 2026, allocating nearly 40% of all expenditures to the military and security forces — a record level since the Soviet era and a clear signal that peace is not part of the Kremlin’s plans for the coming year.
This was reported by the Centre for Countering Disinformation (CCD) at Ukraine’s National Security and Defence Council.
The CCD notes that sanctions have caused oil and gas revenues to collapse, resulting in a budget deficit of 1.6% of GDP. To cover the shortfall, the Kremlin is cutting social programs, whose share of the budget has fallen to 25% — the lowest in 20 years.
At the same time, new taxes are being introduced: VAT is raised to 22%, small businesses face additional fees, and ordinary Russians are burdened with higher costs. According to the Centre for Political and Economic Analysis, this confirms that the Kremlin’s priority is a prolonged war, even at the cost of economic decline and impoverishment of its population.
The Russian State Duma approved a budget in which military spending is one and a half times higher than social spending. After two months of surplus, Russia’s budget has returned to deficit: in October, the Ministry of Finance spent 3.4 trillion roubles on revenues of 3 trillion, pushing the deficit from 3.8 to 4.2 trillion roubles over ten months.
The Russian economy is entering a prolonged recession, with companies reporting non-payments, falling demand, and lack of working capital. Annual economic growth has dropped from around 5% at the end of 2024 to zero. Analysts cite inflation, military investment, and falling oil prices amid tariffs as key factors.
After three years of unexpected growth, Russia is facing a sudden slowdown, with war costs, inflation, and declining oil revenues weighing on an economy previously considered resilient to sanctions.
