Russia's soaring deficit: War costs push spending to new heights
Russia is reporting a budget deficit exceeding 3 trillion rubles for the third consecutive time. The main reason is the cost of the war in Ukraine, according to "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 in 2024 reached 3.49 trillion rubles, which corresponds to approximately 46.25 billion CAD. 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."
In relation to GDP, the deficit decreased from 1.9% to 1.7%, but it remains significantly higher than the Russian Finance Ministry's forecast, which predicted 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, defence spending is projected at 13.5 trillion rubles (179 billion CAD), 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 (169 billion CAD), and in 2027, it will be 13.1 trillion rubles (173 billion CAD). Russia intends to allocate at least 40% of its budget to defence 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 was 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.
