Russia's budget deficit soars as military spending climbs
Russia is recording a budget deficit exceeding 3 trillion rubles for the third consecutive time. The main reason is the cost of the war in Ukraine, reports "Puls Biznesu." In 2024, the deficit amounted to 3.49 trillion rubles, almost double the planned level.
According to data from the Russian Ministry of Finance, Russia's budget deficit 2024 reached 3.49 trillion rubles, corresponding to 34.4 billion USD. State revenues increased by 26% to 36.71 trillion rubles, while expenditures rose by 24.2% to 40.19 trillion rubles. This information was provided by "Puls Biznesu."
About GDP, the deficit decreased from 1.9% to 1.7%, but it is still significantly higher than the assumptions of the Russian Finance Ministry, which forecasted a deficit of 0.9% of GDP. This value was expected to be around 1.6 trillion rubles. Excluding oil and gas revenues, the deficit rose to 7.3% of GDP.
Nearly half of the budget for the military
In 2025, defense spending is projected at 13.5 trillion rubles (134 billion USD), representing a 30% increase compared to the current year. This amount accounts for 6.31% of Russia's GDP.
Meanwhile, in 2026, military spending is planned to be 12.8 trillion rubles (127 billion USD), and in 2027, it is expected to be 13.1 trillion rubles (130 billion USD). Overall, Russia intends to allocate at least 40% of its budget to defense and national security from 2025 to 2027.
Since 2022, Moscow has comprehensively reoriented its economy toward war operations, including the intensive development of the military industry and a significant increase in employment in this sector. Russia's military budget for the current year is already at a record high, exceeding the 2023 level by 70%. Along with investments in the security sector, it accounted for 8.7% of GDP.
