Russia plans to spend almost 17.1 trillion roubles ($202.58 billion) on defence in 2027, an amount approximately 27% higher than the 13.5 trillion roubles (around $160 billion) initially forecast and the highest since the start of the war in Ukraine in 2022, according to Russian government documents reviewed by Reuters.

Total defence spending is expected to reach 50 trillion roubles (approximately $590 billion) over the next three years, according to the same documents. For 2026, the government had planned to spend 12.1 trillion roubles (around $140 billion) on defence, although the actual figure is classified and will not be made public by the Kremlin. At the same time, some military expenditure may also be recorded under other budget categories.

The documents also show that the Kremlin has revised upwards its estimate for the 2026 budget deficit to 3.2% of GDP, from 1.6% previously. Total government spending in 2026 is expected to increase by 13.2%, to 48.6 trillion roubles ($580 billion), equivalent to 20.9% of GDP.

The Russian government is expected to submit the draft budget to parliament by 1 October, while last week it announced plans for further tax increases in 2027 in order to finance the widening deficit. According to the documents, a new tax on excess profits of metals and mining companies is expected to generate around 200 billion roubles ($2.37 trillion) annually.

In 2026, the government also expects to increase net borrowing by 26%, to 5 trillion roubles, while planning to use 459 billion roubles — around 11% of the liquid portion of the National Wealth Fund — to contain the deficit.

At the same time, it has lowered its forecast for oil and gas revenues in 2026 to 7.6 trillion roubles ($90 billion), from 8.9 trillion roubles ($110 billion) initially estimated.

The government documents also show that public debt is expected to rise to 21.7% of GDP in 2027, from 19.9% in 2026, exceeding the 20% threshold that Russian authorities consider safe.

Total borrowing in 2027 is projected to increase by 43%, reaching 7.7 trillion roubles (approximately $91 billion).