Russia’s budgets now embed a war economy: multi-year plans channel an extraordinary share of state resources into defense, security, and war-related industry—signaling intent and capacity to sustain the Ukraine campaign for years, not months.
The Short Version
- Defense has consumed roughly a third of Russia’s federal budget since 2024, a structural, not episodic, shift.
- SIPRI and Reuters estimate Russia’s 2024 military outlays at about $149 billion—around 7% of GDP—with growth continuing into 2025–2027.
- Draft and approved plans lift 2027 defense spending to about 17.1 trillion rubles, the highest of the war and well above pre-2022 baselines.
- Opaque “classified” lines and security spending outside the Defense Ministry push the true war burden above the headline numbers.
What the budgets say—and why they matter
Budgets are statements of priority made real. Since late 2023, Moscow has redirected a towering share of public money to war. The 2024 federal plan assigned nearly one-third of all spending to defense—an allocation Kremlin officials explicitly justified as wartime necessity. Independent compilers converge on the same macro picture: in 2024, Russia’s military expenditure was roughly $149 billion, up 38% from 2023 and equal to about 7.1% of GDP; this level is consistent with war footing for a large, industrial state. Those magnitudes are not a blip. Successive planning documents and public reporting show sustained elevation into the back half of the decade, with the 2027 defense line rising to around 17.1 trillion rubles—an increase of more than a quarter versus the prior medium-term path and a post‑invasion high.
In practice, “defense” in the narrow budget sense understates the war effort. Several credible assessments document large and growing classified expenditures, plus security and industrial subsidies that sit outside the Defense Ministry but serve the same end—financing the campaign and its human and industrial base. In 2024, about 10 trillion rubles of federal outlays were non-disclosed; RAND’s reading of the 2025–2027 framework likewise highlights substantial increases in “national defense” and associated security categories beyond the visible line items.
How a modern war economy works in Russia’s case
War financing is not just about buying shells. Russia’s current model mixes four pillars. First, direct procurement—ammunition, armor, air defense, drones, and strike systems—scaled up through mobilized industrial capacity and import substitution. Second, manpower payments: high enlistment bonuses, elevated monthly pay, and survivor benefits designed to sustain recruitment and retention even as casualty rates remain significant. Third, security-state spending: internal troops, border and occupation forces, and information control—funded through ministries outside defense but functionally tied to the campaign. Fourth, industrial policy: state orders, cheap credit, and capital injections to priority factories and design bureaus to raise throughput and diversify supply chains away from sanction-exposed components. Each pillar shows up somewhere in the budget, but not always under the same heading; hence the importance of tracking the aggregate, not just the Defense Ministry’s line.
Stockholm International Peace Research Institute’s series since 2022 maps this cumulative rise, noting both the steep nominal increase and the jump in the defense share of total government spending to historic post‑Soviet levels. Analysts also observe a hallmark of wartime budgeting: opacity. The jump in classified residuals, the reclassification of certain procurements, and the spread of war costs across security and industrial chapters make the headline defense total a floor, not a ceiling.
From surge to posture: evidence of multi-year planning
Temporary spikes can be political theater; multi-year commitments are posture. Here, the evidence is squarely in the second category. Reuters, citing budget documents, reports that Russia intends to spend 17.1 trillion rubles on defense in 2027—27% above what had been penciled in earlier and the highest figure since the invasion began. Separate reporting indicates total defense over the coming three-year horizon around 50 trillion rubles, consistent with a sustained mobilization of fiscal capacity rather than a year-end surge. Outside compilers—Military.com summarizing Russian plans, and SIPRI’s consecutive annual assessments—tell the same story: plans that abandon earlier talk of trimming and instead normalize high war spending through mid‑decade.
The shape of the curve matters. After the large 2024 jump, growth moderates in real terms, which is exactly what one expects as a surge transitions into an entrenched baseline. But the baseline itself remains high, signaling that planners expect continuing operational demands—manpower replacement, munitions throughput, air defense consumption, and capital expenditures for expanded capacity—to persist beyond any single campaign season.
Economic trade-offs and constraints
Any war economy runs on trade-offs. Russia’s are visible: civilian programs are squeezed, and the opportunity cost of capital rises as more rubles chase defense output. Reporting on medium-term drafts points to cuts or slower growth in welfare and education as defense takes precedence—classic guns-over-butter choices that, over time, can sap productivity and consumer welfare. Commentators have described the macro consequence as “stagnation,” a plausible outcome when a large share of investment and labor is absorbed into low‑multiplier military production and frontline support. That said, the center can sustain such trade-offs for longer than many assume if hydrocarbon revenues, financial repression, and import substitution keep nominal resources flowing to the war sector.
The opacity caveat belongs here, not as a hedge on the basic facts but as a practical constraint on precision. Classified lines and shifting categorizations mean no outside estimate will nail the exact number. The pattern, however—elevated military outlays as a share of GDP and total spending, backed by multi-year plans—does not depend on perfect visibility to be clear.
Russia plans record military spending of $205bn in 2027, preparing for a long war in Ukraine.
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What it means for the battlefield and for policy
For Ukraine and its backers, these budgets mean Russia has planned fiscal room to replace equipment and personnel at meaningful scale while absorbing losses and missile-defense expenditures. A 7%‑of‑GDP military burden is heavy but historically survivable for a commodity exporter with controlled capital flows. It translates into consistent orders for artillery shells, loitering munitions, and short‑range air defense, plus enough cash incentives to keep recruitment pipelines operating, disproportionately in poorer regions where military pay outstrips local alternatives. The result is operational stamina: not guaranteed victory, but reduced odds of sudden exhaustion.
For Europe and the United States, the signal is strategic duration. European defense budgets have already pivoted upward in response to the war; the persistence of Russia’s war economy argues against planning for a quick reversion to pre‑2022 force postures. Industrial capacity—missile interceptors, 155mm shells, integrated air defense—must be sized for years, not months, with attention to sustaining stocks while supplying Ukraine. Policymakers should read Russia’s medium-term plans as a rationale for their own: stable appropriations, multi‑year production contracts, and the workforce investments that convert money into materiel. Deterrence is not an event; it is a supply chain with funding attached.
The through-line: priority made durable
Strip away the fog of classified annexes and shifting categories and the through‑line endures. Since 2024, Russia has prioritized war as the organizing principle of its public finances. Independent estimates place the military burden near post‑Soviet highs; planning documents carry that burden forward into the later 2020s; and the institutional machinery—defense industry, security services, compensation regimes—has been funded accordingly. That is what preparation for years of war looks like on paper and, increasingly, in practice.
Sources:
military.com, defence24.com, reuters.com, fullfact.org, sipri.org, rand.org
