The Kremlin is preparing to increase war spending by 40% despite the budget deficit
Russian authorities are preparing for a significant increase in military spending in 2026, despite the rapidly growing budget deficit. According to preliminary estimates, war-related spending could rise by nearly 40% compared to initial plans.
According to sources familiar with budget discussions within the Russian government, additional defense spending could range from 4 to 5 trillion rubles.
Initially, the Russian budget for 2026 allocated 12.9 trillion rubles to the “national defense” line item, which is even slightly less than the previous year’s figure, when military spending reached 13.5 trillion rubles.
However, the actual amount of funding for the military could rise to nearly 18 trillion rubles, which would account for about 41% of all planned federal budget expenditures.
If we also take into account expenditures under the “national security” category—which includes funding for the Ministry of Internal Affairs, the Russian Guard, the special services, and other security agencies—total spending on the security sector could reach 21.8 trillion rubles. Thus, nearly every other ruble in Russia’s budget may be directed toward the war and security agencies.
At the same time, the country’s financial situation remains difficult. As of early June, Russia’s budget deficit had already reached 6 trillion rubles, exceeding the figure for the entire previous year.
To cover additional military expenditures, the Kremlin is considering several financing mechanisms. Specifically, these include:
- cutting funding for civilian programs and social budget items;
- using accumulated reserves;
- increasing government borrowing through the issuance of federal bonds.
According to preliminary estimates, the Russian government plans to raise between 2 and 3 trillion rubles specifically by increasing public debt.
Thus, despite growing budgetary problems, the Kremlin is demonstrating a willingness to continue increasing funding for the war, even at the cost of cutting civilian spending and increasing the debt burden on the country’s economy.
The number of regions with budget deficits in Russia has risen sharply—by the end of the first quarter of 2026, budget shortfalls were recorded in 56 of the 89 federal subjects, accounting for approximately two-thirds of the country.
The Russian government has been forced to return massive sums from the budget to oil companies amid refining problems following a series of attacks on oil refineries. In just a few months, these payments have reached hundreds of billions of rubles, significantly impacting budget revenues and the oil sector’s balance sheet.
Russia’s spending on the war against Ukraine this year has significantly exceeded planned figures, and the budget can no longer withstand the strain. Estimates suggest that additional expenditures could reach at least $28 billion, creating a serious deficit in the Russian Federation’s finances.
