Russia plans to increase defence spending by US$30 billion next year, but hides it – ISW

The Russian government is planning a further increase in defence spending in 2025, although Kremlin officials seem to be emphasising planned social spending, avoiding discussion of the increase in defence spending. 

Source: Institute for the Study of War (ISW) 

Details: The Russian Cabinet of Ministers approved a draft federal budget for 2025-2027 on 29 September, which will be submitted to the State Duma by October 1. The budget projects a nearly 12% increase in federal revenue for 2025 compared to 2024, with non-oil and gas revenue expected to account for 73% of the total.

Bloomberg reported on 23 September that it had seen proposals for the three-year budget, revealing plans for Russia to spend RUB 13.2 trillion (around US$140 billion) on defence in 2025, up from the projected RUB 10.4 trillion (around US$110 billion) for 2024. 

It stated that in 2025, approximately 40% of Russia's spending will be allocated to national defence and domestic security, surpassing the combined spending on education, healthcare, social policies, and the federal economy.

The Kremlin is also expected to increase spending on classified items from 11.1 trillion roubles (around US$117 billion) in 2024 to 12.9 trillion roubles (around US$136 billion) in 2025. 

On 24 September, Russian Prime Minister Mikhail Mishustin stated that the government would meet "all social obligations to citizens" while emphasising planned investments in healthcare, pensions, and national projects. 

Russian Finance Minister Anton Siluanov acknowledged the substantial allocation of resources to Russia's "special military operation" [as Russian propaganda terms the war against Ukraine], but stressed that RUB 40 trillion (around US$424 billion) would be spent on 19 national projects over six years, double the amount allocated between 2019 and 2024. He also noted plans to allocate 180 billion roubles (about US$1.9 billion) to modernise public utility infrastructure and support preferential mortgage programmes.

According to the Institute for the Study of War (ISW), Kremlin officials are likely aware of potential war fatigue among the Russian population and are focusing on social projects to maintain public support for the war.

To quote the ISW’s Key Takeaways on 29 September:

• Western countries continue to invest in the growth of Ukraine's defence industrial base (DIB). 
• Ukrainian forces reportedly struck a Russian ammunition depot and missile storage facility near Kotluban, Volgograd Oblast, on 29 September. 
• The Russian government is reportedly planning to further increase defence spending in 2025, although Kremlin officials appear to be highlighting planned social spending while avoiding discussions of increased defence spending. 
• Ukrainian forces recently advanced in Glushkovsky district, west of the Ukrainian salient in Kursk Oblast. 
• Russian forces recently advanced on the Toretsk and Pokrovsk fronts.

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