Russian military budget dominates despite economic pressures

The latest intelligence update mentioned that on September 30, the Russian government submitted the draft budget for 2025 to the State Duma. It predicts that expenditures will rise by 5 percent, excluding inflation, to 41.5 trillion rubles, equivalent to CAD 611 billion.

It was noted that the proposed budget anticipates approximately a 25-percent increase in military spending in 2025 compared to 2024, and they will constitute 32 percent of all budgetary expenditures, while before the war, in the budget of 2021, this percentage was 14.5 percent. It was assessed that the new budget shows that Russia continues to prioritize war funding over all other national priorities. For example, spending on social goals is assumed to decrease by 16 percent.

"Demand continues to outpace supply in the Russian economy and the expanding budget for 2025 is highly likely to worsen this. This will almost certainly add to inflationary pressure, which remains a key issue, due to the inflation rate being approximately 9% in August 2024," wrote the British Ministry of Defence.

A graph displaying the main items in the 2025 budget draft was also provided.

According to Ukrainian intelligence, Russia spends CAD 1.5 billion on missiles and CAD 137 million on drones every month, Forbes magazine reported. The average production rate of missiles in Russia is 132 to 171 monthly.

Russia spends the most on Kh-101 cruise missiles, which allow targeting across Ukraine's entire territory. CAD 805 million is allocated for this monthly, and an average of 45 rockets of this type are produced. Additionally, CAD 313 million is spent on Kalibr missiles, with an average monthly production of 35.