Nearly 40% of Russian budget earmarked for military and police from next year

Russian expenditure on national defence and law enforcement is due to reach 38% of the federal budget, according to a draft expenditure proposal for 2026 to 2028 that was submitted to the country’s lower house of parliament, the State Duma, on Monday.

According to state-affiliated news agency Interfax, the authorities plan to spend 12.93 trillion rubles (€133.5 billion) on defence next year. When combined with spending on national security, the army, police and secret services, the total cost will amount to 16.84 trillion rubles (€173.8 billion), or 38% of the total federal budget in 2026.

A source with knowledge of the budget process told Reuters that Russia’s actual military spending often exceeds targets, and may be hidden within other types of expenditure. The authorities also plan to spend a further 12.71 trillion rubles (€131.2 billion) on “undisclosed items”, equivalent to 28.8% of total expenditure, next year. In 2025, that figure was equivalent to 31.5% of total treasury spending.

Last week, Russia’s Finance Ministry proposed raising VAT to 22% as a means of plugging a hole in the federal budget caused by increasingly out-of-control military spending. However, economists who spoke to Novaya Europe said the increase on VAT would slow down the economy, lead to a new wave of inflation and price rises on most goods and services, and leave ordinary Russians out of pocket.