Russia's defence spending to surge as oil and gas revenues decline
Russian spending on defence and security will account for 32% of all budgetary expenditures in 2025. Payment of soldiers' wages and administrative salaries will constitute about 10% of the planned military expenditures.
Reuters reported on Monday that Russia will increase its war budget by 23% in 2025, from 10.8 trillion roubles planned for this year to 13.5 trillion roubles (approximately 145 billion USD), citing the published draft of the three-year budget. Additionally, revenues from oil and gas are expected to decline between 2025 and 2027.
According to the draft, defence and security expenditures will account for 32% of all budgetary spending in 2025. Salaries for soldiers and administrative staff will constitute about 10% of the planned military expenditures.
A budget weakened by oil and gas
Furthermore, the draft budget reveals that state revenues from oil and gas will drop to 10.9 trillion roubles (117.3 billion USD) in 2025 – or 5.1% of GDP – from 11.3 trillion roubles (approximately 121.5 billion USD) in planned revenues for the current year. Economists from the Russian Ministry of Finance predict that these revenues will fall to 10.56 trillion roubles (approximately 113 billion USD) in 2026 and 9.77 trillion roubles (approximately 105 billion USD) in 2027.
Bloomberg previously reported on Russia's planned increase in military spending, which also calculated that these expenditures will only decrease to 5.6% of GDP in 2026 and to 5.1% of GDP in 2027.
The Russian Minister of Finance, Anton Siluanov, announced that the most crucial parts of next year's budget are expenditures on the "special military operation in Ukraine"—as the Kremlin's war against that country is referred to in Russian propaganda—and support for the army. Bloomberg previously noted that military spending exceeds, for example, the funds allocated for education, healthcare, or social policy.
