Russian Military Spending Hits Record $123 Billion in First Half of 2026

Russia’s federal budget expenditures on its war with Ukraine reached a record 10.687 trillion rubles ($123.4 billion) in the first half of 2026, according to analysis by Janis Kluge, a researcher at the German Institute for International and Security Affairs, The Moscow Times reported on September 7.

Based on data from the Russian Finance Ministry, Kluge calculated that spending on the military and weapons production increased by 30%, or 2.46 trillion rubles ($28.4 billion), compared to the same period last year.

Relative to the first half of 2024, Russia’s military budget has grown by 65% (an increase of 4.211 trillion rubles, or $48.6 billion) and has surged by 285% compared to the first year of the war.

Compared to pre-war 2021, military spending has increased more than fivefold, according to the report.

On average, the Kremlin’s military operations consumed 1.78 trillion rubles ($20.6 billion) per month, 59 billion rubles ($681 million) per day, or 2.5 billion rubles ($28.9 million) every hour during the first half of 2026, The Moscow Times noted.

By the end of the half-year, military spending accounted for 43.8% of all federal budget expenditures, marking a “new all-time high,” according to Kluge. The researcher emphasized that the figures appear “even more extreme” when compared to budget revenues, with 57.3% of all incoming government funds directed toward the army and the military-industrial complex.

In the previous year, the war consumed 39.2% of expenditures and 46.8% of revenues, while pre-war levels stood at 20% and 19.8%, respectively, The Moscow Times wrote.

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Kremlin Liquidates Gold Reserves to Historic Six-Year Lows Amid Escalating Budget Demands

Aug 20, 2026 21:02

According to Kluge’s calculations, exactly two-thirds of the Russian military budget is now classified. Over the first six months of the year, the Russian government spent 3.546 trillion rubles ($41 billion) on transparent defense items, while allocating 7.141 trillion rubles ($82.5 billion) to classified items. This “shadow” treasury spending represents a 42% increase from the previous year and a more than sevenfold increase from the pre-war period.

Cumulatively since the beginning of 2022, the Russian government has spent 57.144 trillion rubles ($660 billion) on the military and weapons procurement, The Moscow Times reported. This total is nearly equivalent to the entirety of the Russian Central Bank’s gold and foreign exchange reserves, which stood at $720.3 billion on August 1, and is more than double the value of the country’s entire gold reserve ($292.8 billion).

While the Russian government’s 2026 budget law initially projected defense spending at 6.7% of GDP, actual expenditures have exceeded this target by approximately 1.5 times, reaching 10.5% of the half-year GDP, Kluge found. Consequently, Russia’s budget deficit grew to 6.45 trillion rubles ($74.5 billion) by early August, doubling the level originally planned for the entire year.

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Western Sanctions and Ukrainian Drone Strikes Push Russian Oil Production to Lowest Since 2009

Sep 01, 2026 16:38

To manage the deficit amid a continuous decline in oil and gas revenues, the Russian government cut civilian spending by a third beginning in the spring and ordered a 15% staff reduction across government agencies, according to sources cited by Bloomberg. Internal Finance Ministry calculations indicate that the budget shortfall could expand to 9 trillion rubles ($103.9 billion) by the end of the year without further sequestration, the sources added.

The severe financial strain detailed in the budget data is being compounded by Ukraine’s long-range strike campaign. Ukraine’s Defense Intelligence Chief Oleh Ivashchenko had previously stated that attacks on Russian energy infrastructure, logistics hubs, and military-industrial facilities are forcing Moscow to halt production and redirect resources toward repairs.

Ivashchenko noted that these systemic disruptions are degrading Russia’s capacity to manufacture weapons and are a major contributing factor to the federal budget deficit reaching $82 billion.

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