Overview
- The Russian government formally sent a three‑year draft federal budget to the State Duma this week that sets defense spending at 17.1 trillion rubles for 2027, a post‑Soviet nominal high and about one third of federal outlays.
- The plan revises 2026’s deficit sharply higher to about 7.345 trillion rubles and projects nearly 16 trillion rubles of combined deficits for 2027–2029, with borrowing of 6.1 trillion rubles planned for 2027.
- To cover shortfalls the draft boosts projected debt servicing to roughly 4.6 trillion rubles in 2027 and seeks about 1.5 trillion rubles of new revenue from higher taxes and levies, including steeper taxes on passive income and VAT on foreign online purchases.
- The budget cuts health, education and social programs by mid‑single digits and trims funding for national projects such as cancer and elderly care, a shift that will raise costs for households and reduce services for patients and students.
- A large share of military and related spending is classified or not fully itemized in public documents, limiting transparency and heightening concerns that sustained wartime costs will squeeze Russia’s fiscal buffers and pressure the Central Bank and economy.