Russia Plans Record 2027 Military Budget With Cuts to Welfare and Schools

Russia plans to spend $202 billion on defence in 2027, a 27% increase set out in draft budget documents. It would be the highest planned total since the war in Ukraine began in 2022. Reuters

The same draft pairs more military spending with less spending at home. Welfare and education funding would be cut in 2027, according to the documents reported on Sept. 29. Social spending would fall by 7 percent. Reuters The New York Times

Debt costs would also rise. Debt-servicing costs, the interest the state pays on its borrowing, would grow by 21.6% in 2027 compared with the earlier plan. They would absorb 9.4% of total spending. Reuters

To cover the cost, the government plans a set of tax hikes in 2027-2029 to fund military spending. The rises are spread over the three-year budget window, not a single year. Reuters

The broader context here is a budget organized around long-term military spending. Like a household directing most of its pay to one bill, social programs and schools absorb the adjustment. Taxes and borrowing costs sit at the center of making it work.

In my view, the mix matters more than any one number. Higher defence outlays, lower social spending, higher debt payments and higher taxes form a loop. If revenue holds up, the structure holds. If not, pressure moves to spending, borrowing, or more revenue steps. The test now is whether lawmakers pass the draft and whether collection and spending follow it.