In a recent interview, experts discussed Russia’s plans to increase its defense spending by 25% in 2025, with projections suggesting a record high of 13.5 trillion rubles, equivalent to approximately $148 billion. This information comes from a draft budget document released by the Russian Parliament on September 30, which indicates an additional 3 trillion rubles over this year’s military budget.
According to The Guardian, the defense and security budget will take up around 40% of Russia’s total expenditures, which will amount to 41.5 trillion rubles. This significant allocation reflects a strategy adopted by President Putin known as “military Keynesianism,” aimed at bolstering military spending to support the ongoing war in Ukraine while simultaneously stimulating domestic consumption—an approach that might inadvertently fuel inflation.
Economic analysts from the Russian media outlet Bell highlighted that this budget increase signifies that the Russian economy is now operating in a “war mode.” They argue that even in the event of a swift conclusion to the conflict in Ukraine, prioritizing military funding and enhancing defense capabilities will remain essential for the government.
The draft budget also reveals a concerning trend for social spending in Russia, which is anticipated to decrease by 16%, from 7.7 trillion rubles this year to 6.5 trillion rubles next year.
This substantial military investment has raised alarms among European strategists, who fear that NATO may be underestimating Russia’s ability to sustain a prolonged conflict. Meanwhile, Ukraine’s future remains uncertain as it navigates its relationships with its closest allies.
