Russia to boost military budget by 23% amid falling oil revenues

Russian expenditures on defence and security will account for 32 percent of all budgetary outlays in 2025. Paying the salaries and wages of the military's administrative segment will constitute about 10 percent of the planned military expenditures.

Reuters reported on Monday at 9:00 AM (ET) that Russia will increase its war budget in 2025 by 23 percent from the 10.8 trillion rubles planned for the current year to 13.5 trillion rubles (approximately $145 billion). The report cited a published draft of the three-year budget. Additionally, revenues from oil and gas are expected to fall in 2025-2027.

According to the draft, defence and security expenditures will account for 32 percent of all budgetary outlays in 2025. Paying the salaries and wages of the military's administrative segment will constitute about 10 percent of the planned military expenditures.

Additionally, the budget draft indicates that state budget revenues from oil and gas will fall to 10.9 trillion rubles ($117.3 billion) in 2025 - which is 5.1 percent of the GDP - from 11.3 trillion rubles (approximately $121.5 billion) of planned revenue for the current year. Economists from the Russian Ministry of Finance predict that these revenues will decrease to 10.56 trillion rubles (approximately $113 billion) in 2026 and 9.77 trillion rubles (approximately $105 billion) in 2027.

Earlier, the Bloomberg agency reported on Russia's planned increase in military spending, calculating that it will drop to 5.6 percent of the GDP in 2026 and to 5.1 percent in 2027.

Russian Finance Minister Anton Siluanov announced that the most significant parts of next year's budget are expenditures for the "special military operation in Ukraine"—as the Kremlin's war against that country is referred to in Russian propaganda—and support for the military. Bloomberg previously noted that spending on the military exceeds, for example, educational, healthcare, or social policy allocations.