Russia: Putin’s war spending at new high

Finance in Moscow

Secret billions are driving up Putin’s military budget

Putin actually wanted to cut military spending this year, but the opposite is apparently the case. Calculations suggest that the numbers are increasing rapidly.

In the first quarter of 2026, Russia’s military spending reached a new high of 5.9 trillion rubles (around 70.4 billion euros). This emerges from calculations by Janis Kluge, a scientist at the Science and Politics Foundation (SWP), based on data from the Ministry of Finance. Accordingly, military spending in the first quarter of 2025 amounted to 4.5 trillion rubles (around 53.7 billion euros), 30 percent less than in the first quarter of this year. Total spending for the first quarter was 12.8 trillion rubles (152.7 billion euros), meaning 46 percent of total spending was spent on the military sector.

In recent months, the Russian financial administration has become increasingly concerned about the federal budget and the costs of the war. The central bank chief Elvira Nabiullina, who has currently disappeared from the scene, is also said to have spoken out against Putin’s high war costs. According to Kluge, tax revenue in the first quarter amounted to just 8.3 trillion rubles (99 billion euros) against the background of new sanctions, the slightly stronger ruble compared to the previous year and the weakening economy in the first quarter. According to the Kremlin, in 2025 the budget deficit amounted to 2.6 percent of gross domestic product (GDP) by the end of the year, despite restrictive monetary policy to reduce the inflation rate.

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According to Kluge, the increase in costs is mainly due to higher “secret expenses”. These have increased by 43 percent compared to the same period last year, and an estimated 85 percent of them will be used for military spending.

The Russian Defense Ministry originally cut planned military spending to 14.9 trillion rubles for all of 2026, according to the Stockholm International Peace Research Institute.

The Moscow Times reported earlier this year that the higher spending would be passed on to the population through higher taxes. According to the report, tax revenues were already around 36.6 trillion rubles (436.6 billion euros) in 2025, below the originally expected value of 40.3 trillion rubles (480.8 billion euros). And so the VAT rate rose from 20 to 22 percent from January 1, 2026, for example.