Russian President Vladimir Putin has made headlines yet again, this time by approving what is described as the most substantial military budget in Russia's modern history—13.49 trillion rubles, equaling about $145 billion—in 2025 alone. This decision highlights the Kremlin's unwavering commitment to increasing its military capabilities amid the enduring conflict with Ukraine, which has now entered its third year.
The approved budget, sourced from the latest document posted on the government's legal acts portal, indicates the military budget will surge by 25% compared to the previous year—a startling rise from 10.8 trillion rubles and nearly doubling the military expenditures from just two years ago. To put things in perspective, the military allocation will be almost four times larger than what was spent pre-war in 2021, which was around 3.5 trillion rubles. Back then, military spending accounted for only about 17% of the budget. Fast forward to 2025, and armed forces expenditures will constitute 32.5% of the total budget—a level not seen since the Soviet era.
According to this new budget breakdown, military expenditures will comprise roughly 6.2% of national GDP, which aligns with funding levels typically associated with military regimes, such as those found in several African nations. Amidst significant allocation to classified items, which is estimated at 12.9 trillion rubles, spending details reveal stark reductions elsewhere, particularly in social budgets.
Meanwhile, social assistance, encompassing pensions and welfare funds, is set to shrink significantly by 16%, changing from 7.731 trillion rubles this year to 6.492 trillion rubles next year. Although the budget anticipates slight increases for 2026 and 2027, the overall figures indicate social spending will remain below current levels.
Beyond direct military funding, the government has included 3.459 trillion rubles for entities related to national security, covering police services, investigative bodies, and other law enforcement divisions. This brings the total expenditure on both military and law enforcement to around 40% of the federal budget, which translates to approximately 16.9 trillion rubles.
Healthcare, on the other hand, will see its budget increase slightly from 1.62 trillion to 1.864 trillion rubles. Nonetheless, numerous key health projects, including initiatives combating cancer and cardiovascular diseases, will take significant cuts to their funding. Interestingly, state-run media will benefit from substantial budget increases, with funding jumping by 13% to 137.2 billion rubles.
Looking at the overall financial picture, the government plans to spend 41.469 trillion rubles for the upcoming year with anticipated revenues of 40.296 trillion rubles, established through taxation. This setup allows for forecasting the treasury deficit to decline from 3.3 trillion rubles this year to 1.2 trillion rubles next year. To manage this tighter budget, the authorities are introducing the largest tax reforms seen in decades, including the implementation of progressive personal income tax brackets and hikes on corporate profit tax—all meant to rake in an extra 2.6 trillion rubles annually.
Adding complexity to the fiscal situation is the continuous devaluation of the ruble against leading currencies—a topic discussed by analysts like Chris Weafer, who note the significant challenges posed by inflation and the need to maintain budget stability. The aim is to limit the budget deficiency, but the falling ruble complicates control as inflation accelerates.
On the backdrop of increased military funding, regional tensions have heightened dramatically. Russia has intensified threats against Ukraine, recently announcing military actions targeting the Kyiv government after months of aggression toward the Ukrainian energy infrastructure. These developments coincide with visits from EU officials—European Council President Antonio Costa and EU foreign policy chief Kaja Kallas—who reaffirmed unwavering support for Ukraine amid the disputes and shifts with U.S. leadership expectations.
During their joint press conference with Ukrainian President Volodymyr Zelenskyy, Costa reiterated the EU's commitment to supporting Ukraine against Russian aggression. Amidst concerns over potential shifts by the U.S. administration, Costa assured, "The EU will stand for Ukraine as long as necessary." It's clear the strategies being discussed include significant financial assistance—€4.2 billion for Ukraine’s budget and monthly aid of €1.5 billion sourced from frozen Russian funds.
Ukrainian President Zelenskyy, reacting to the urgency of the situation, insisted any future ceasefire talks must involve EU and NATO representatives to secure Ukraine’s sovereignty and future. He has continued to stress, "We will never legally recognize any occupation of our lands by the Russian Federation."
Turkey's President, Recep Tayyip Erdoğan, weighed in on the situation, contending he's ready to facilitate negotiations if both sides express interest. The shifting balance of alliances reflects the uncertain stakes of the conflict, as Ukrainian military strategies remain reliant on the continued support of Western nations to fend off Russian advances.
What remains crystal clear is the financial commitment from the Kremlin to secure military dominance, as global observers remain watchful of the repercussions—both on the battlefield and the domestic front. With inflationary pressures, social spending cuts, and regional military engagements, the balance of Russia's internal and external strategies will be pivotal as they navigate through such tumultuous times.
