Revised military expenditure

Russian defense spending is scheduled to reach 17 trillion rubles ($199 billion) by the end of 2026. This figure represents an increase of nearly $60 billion, or approximately 40%, compared to the initial budget plan prepared by the government in late 2025. The original 2026 defense allocation stood at 12.9 trillion rubles, meaning realized expenditures will exceed the baseline target by nearly 32%. A year prior, Moscow had planned only a moderate increase in defense costs in an effort to contain its fiscal deficit and replenish reserves depleted throughout the conflict. The revised spending level represents the highest proportion of state resources devoted to the armed forces since the Soviet era.

2026 Initial plan12.9

2026 Revised total17

2027 Draft budget17.1

2028 Projection16.6

2029 Projection16.3

2026 Initial plan

12.9 trillion rubles

2026 Revised total

17 trillion rubles

2027 Draft budget

17.1 trillion rubles

2028 Projection

16.6 trillion rubles

2029 Projection

16.3 trillion rubles

Data from the article text

Diplomatic impasse in Alaska

The expansion in military outlays follows a strategic recalculation in Moscow regarding negotiations with the United States. Russian President Vladimir Putin met with US President Donald Trump in Anchorage, Alaska, in August 2025. Following that summit, the Kremlin anticipated that American diplomatic pressure would compel Ukraine to agree to a settlement within twelve months, removing the necessity for substantial spending increases. By January 2026, Russian leadership determined that the Alaska dialogue would not yield an acceptable agreement and that American-led efforts would not produce a diplomatic breakthrough. Russian officials also noted growing concern over hawkish rhetoric emerging from European capitals as Western governments evaluated Russian intentions.

Budget deficit and funding mechanisms

To sustain military operations, the Russian government began accelerating advance payments to arms manufacturers and scaling up related outlays at the beginning of 2026. Calculations by Janis Kluge of the German Institute for International and Security Affairs show that Russia spent more than 10.5 trillion rubles on the military in the first half of the year, nearly exhausting the official annual budget. By May 2026, spending had overshot planned targets by roughly 2.4 trillion rubles. Vladislav Inozemtsev of the Royal Institute of International Affairs in London addressed the budgetary overrun.

“It was necessary to increase funds for the special military operation.”

These outlays expanded the projected 2026 federal budget deficit to over 7 trillion rubles, compared to the initial plan of 3.8 trillion rubles. The government financed the extra spending by increasing domestic borrowing and selling state gold reserves.

Multi-year projections and infrastructure strikes

Longer-term fiscal planning indicates that military outlays will remain elevated across future cycles. On 1 October 2026, the government submitted its draft 2027 budget to the State Duma, allocating 17.1 trillion rubles to defense, which represents 35% of all federal spending. Forward projections estimate outlays of 16.6 trillion rubles in 2028 and 16.3 trillion rubles in 2029. Alongside budget expansion, Russian forces intensified operations against Ukrainian targets starting in the summer, including drone strikes on bridges and municipal infrastructure in Kyiv. An August-dated Russian military document obtained by Ukrainian authorities outlined plans for a winter campaign aimed at disconnecting three operating nuclear power plants from the Ukrainian grid. The document also targeted water pumping stations and wastewater treatment facilities in Kyiv, Kharkiv, and Odesa, with the goal of reducing electricity supplies by up to 90% and disrupting municipal heating and sewage services.