Putin Signs 2026 Budget, Allocating Record $166 Billion for Ukraine War
On November 29, 2025, Russian President Vladimir Putin signed the federal budget for the year 2026, which includes a historic allocation of at least 1.37 trillion rubles (approximately $166 billion) designated for defense and security. This allocation is the largest military expenditure by Russia since the Soviet era and represents about one-third of the total federal budget, which amounts to 50.5 trillion rubles (around $615 billion).
Key Details
The 2026 budget reflects a significant shift in Russia"s financial priorities amidst the ongoing invasion of Ukraine. The defense and security sector will receive 38% of the total budget, which indicates a substantial increase in military spending. This increase comes at the expense of social spending, which has been reduced to 25.1% of the overall budget, marking a decline from previous years. The budgetary adjustments also include provisions for the occupied territories in Ukraine, further emphasizing the Kremlin"s commitment to its military objectives in the region.
Economists have raised concerns regarding the sustainability of this budget, predicting a GDP deficit of approximately 1.6%. To address this fiscal shortfall, there are proposals to increase the Value Added Tax (VAT) to 22%, a move that could have significant implications for the Russian economy and its citizens.
Background
The decision to allocate such a large portion of the federal budget to defense comes in the context of Russia"s ongoing military operations in Ukraine, which began in February 2022. The conflict has led to extensive military engagements and has strained Russia"s economic resources. The budget for 2026 is indicative of the Kremlin"s prioritization of military spending over social welfare, reflecting a broader strategy to maintain military readiness and support ongoing operations in Ukraine.
Historically, military expenditure in Russia has fluctuated, but the current budget marks a significant commitment to defense, reminiscent of the Soviet Union"s military spending during the Cold War. The emphasis on military funding over social services raises questions about the potential long-term impacts on the Russian populace, particularly in areas such as healthcare, education, and social welfare programs.
What"s Next
The implications of this budget are profound, as it signals Russia"s intent to continue its military campaign in Ukraine without significant reductions in defense spending. The proposed VAT increase could lead to higher costs for consumers, potentially exacerbating economic hardships for ordinary Russians. As the situation develops, it will be crucial to monitor how these budgetary decisions affect both the domestic economy and the ongoing conflict in Ukraine.
For further insights into related geopolitical developments, see our coverage on recent developments in international politics.
![[Video] Left-wing radicals attack AfD politicians and journalists in Giessen](/_next/image?url=%2Fapi%2Fimage%2Fthumbnails%2Fthumbnail-1764438663474-e7iix9-thumbnail.jpg&w=3840&q=75)
