Russia's defence budget goes Cold War: Putin sets aside $202 billion for military

Russia is embarking on an ambitious plan to dedicate 17.1 trillion roubles to its defence by the year 2027

Russia is preparing to spend a staggering 17.1 trillion roubles, or about $202.6 billion, on defence in 2027, up 27 percent from the 13.5 trillion roubles earlier allocated for the year and one of the largest military budgets since the fall of the Soviet Union in 1991.The proposed spending, disclosed in Russian government budget documents reviewed by Reuters, underlines how deeply the Ukraine war has reshaped Moscow's economic priorities, with defence set to absorb about 6.9 percent of Russia's projected economic output.The scale of the increase becomes clearer when viewed against Russia's pre-war spending. Defence expenditure has surged since Moscow launched its full-scale invasion of Ukraine in February 2022, rising from roughly 3 percent of GDP in the early war years to nearly 7 percent under the proposed 2027 allocation.Russia's military burden has now reached levels that invite comparisons with the Soviet era.Since the collapse of the Soviet Union in 1991, Russia has not allocated such a large share of its economy to defence. The proposed 6.9 percent of GDP is comparable with the heavy military burden seen during some of the Soviet Union's most intense Cold War years.In 1989, Soviet leader Mikhail Gorbachev disclosed that the Soviet Union's defence spending stood at 77.3 billion roubles, equivalent to about $124 billion at the official exchange rate at the time.

The figure represented roughly 8.4 percent of the Soviet Union's GDP, according to contemporary assessments.At that time, western governments and analysts disputed the figure. The UK government estimated that Soviet military outlays, calculated using Nato-style definitions, were roughly twice the officially disclosed amount and accounted for around 15 to 17 percent of Soviet GDP.The 2027 allocation also comes despite growing pressure on Russia's finances.

Moscow is facing lower projected oil and gas revenues, a wider budget deficit and increased borrowing, yet the Kremlin is continuing to prioritise military expenditure. The result is a Russian economy increasingly geared towards sustaining a prolonged war effort rather than returning to pre-war spending patterns.Russia's defence spending has surged since the Ukraine invasion, rising from around 3 to 4 trillion roubles before the war to 4.7 trillion in 2022, 6.4 trillion in 2023 and about 10.8 trillion in 2024.

Spending climbed further in 2025, while the proposed 17.1 trillion roubles for 2027 would mark a dramatic increase from pre-war levels.As the Ukraine war intensifies, the surge in defence spending is expected to help Moscow sustain its military campaign and replenish weapons and equipment lost on the battlefield.The additional funding will support Russia's defence-industrial base, including production of missiles, drones, artillery ammunition, armoured vehicles and other military equipment, while also covering troop salaries, recruitment incentives and the replacement of battlefield losses.