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Russia Faces $133 Billion Budget Deficit by 2027 as Defense Spending Soars
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![Photo of Roman Kohanets]( "Photo of Roman Kohanets")
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Russia’s federal budget is forecast to record a cumulative deficit of around $133 billion between 2025 and 2027, according to explanatory notes attached to the draft budget published on September 8, The Moscow Times reported.
For 2025, the government expects a shortfall of $30 billion, followed by $51 billion in 2026 and $52 billion in 2027. Total revenues are projected at roughly $376 billion in 2025, $393 billion in 2026, and $407 billion in 2027. Expenditures, however, are set much higher at $406 billion, $444 billion, and $459 billion, respectively.
Russian Finance Ministry acknowledged that defense and security will remain the fastest-growing categories of spending, accounting for nearly a third of all expenditures. Spending on defense alone is expected to exceed $135 billion annually, compared with about $120 billion in 2024.
To cover the gaps, the government plans to rely on domestic borrowing and the National Wealth Fund. Officials said borrowing could reach up to $60 billion annually, with additional withdrawals from the fund to maintain liquidity. “The resources of the fund and the market’s capacity will ensure the financing of the projected deficit,” the ministry stated.
Russia’s Accounts Chamber has repeatedly warned that while oil and gas revenues are expected to increase modestly due to higher export duties and a weaker ruble, non-oil revenues are stagnating. Independent analysts highlight that the reliance on borrowing may push debt servicing costs beyond $20 billion per year by 2027, further tightening fiscal space.
Earlier, it was reported that analysts expect the 2025 budget deficit to surpass the planned target—estimated at around 5 trillion roubles (approximately USD 61 billion)—as defense costs surge, prompting consideration of tax hikes, spending cuts, and austerity.
