Russia Plans Record $200B Defense Budget as Healthcare, Education Face Cuts

Russia plans to sharply increase military spending in 2027 while cutting planned funding for healthcare, education and social programs, as the mounting cost of its war against Ukraine puts growing pressure on the Kremlin’s finances. The draft federal budget submitted to Russia’s State Duma would raise defense spending to 17.1 trillion rubles – roughly $203 billion – in 2027, about 27% above what Moscow had previously planned for that year. It would mark Russia’s highest military spending since the full-scale invasion began in 2022.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. Defense spending would account for more than a third of federal expenditures and exceed planned spending on healthcare, education and social policy combined, according to budget documents reviewed by Reuters. The figures underline how deeply the war has reshaped Russia’s economy as Moscow prepares for another year of high-intensity fighting while simultaneously confronting weaker revenues, growing borrowing needs and rising debt-servicing costs. The Russian government formally submitted its 2027–2029 budget to parliament on Sept. 30, describing defense and security needs as one of its principal priorities. Defense spending jumps again Russia had previously budgeted about 13.5 trillion rubles for defense in 2027. The new proposal raises that figure to 17.1 trillion rubles. Over the full 2027–2029 period, Moscow is expected to spend roughly 50 trillion rubles on defense, according to budget documents. Other Topics of Interest Poland Drafts ‘Pre-War’ Readiness Law to Speed Up Allied Troop Deployment The bill would allow earlier deployment of both Polish and allied troops, as well as to align defense plans with NATO systems. Although the government currently forecasts some reduction in military spending after 2027, Russia has repeatedly exceeded its own longer-term defense projections since launching the full-scale invasion. That makes the headline figures potentially only a starting point. Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis, has argued that published defense totals should be viewed as an opening position in negotiations between Russia’s Finance Ministry and the country’s security establishment rather than a firm ceiling. Actual military spending is also partly classified, making the full cost of the war difficult to calculate independently. Russia’s military burden has already expanded dramatically. Important Stories reported that defense-related expenditures accounted for 43.8% of federal spending in the first half of 2026, compared with less than 20% before the full-scale war. Healthcare and education squeezed The surge in defense expenditure comes with cuts elsewhere. Compared with earlier government plans for 2027, spending on education is set to fall by about 6%, healthcare by nearly 7% and social policy by roughly 7%, according to Reuters’ review of the draft budget. Healthcare programs face particularly steep reductions. Important Stories found that funding for the construction and renovation of regional outpatient clinics would be cut by more than half, while spending on cancer medicines and oncology equipment would fall from almost 148.5 billion rubles to about 44.9 billion rubles. Funding for ambulance development would also be reduced by nearly a third. Eight of 11 national medical projects face reductions, according to the outlet’s analysis of the budget documents. The shift continues a trend already visible at the regional level. Earlier this year, Important Stories found that 19 Russian regions had significantly reduced healthcare spending in their 2026 budgets – the highest number since the full-scale invasion began. Combined planned reductions totaled about 107 billion rubles. Infrastructure and other civilian projects are also being squeezed. Spending on infrastructure, agriculture and other economic sectors is expected to fall by more than 7% compared with previous plans, AFP reported. Moscow turns to taxes and borrowing Russia has run a federal budget deficit every year since launching its full-scale invasion of Ukraine. For 2027, the deficit is projected at around 5.4 trillion rubles, while state debt is expected to rise to about 21.7% of GDP – above the 20% level Russia’s Finance Ministry had previously described as a safe threshold. Borrowing is also rising sharply. Russia is expected to rely increasingly on domestic debt markets while introducing additional tax increases, including higher levies on some investment income and new windfall taxation on metals and mining businesses. The Kremlin has also sought unconventional sources of revenue. Reuters reported Friday that wealthy Russians contributed 471 billion rubles to the federal budget in 2026 through what authorities described as voluntary payments, while the government expects another 385 billion rubles from the sale of seized private assets. War spending increasingly dominates Russia’s economy The new figures illustrate the growing trade-offs facing the Kremlin as the war enters another year. Russia has continued to expand weapons production and military expenditure even as civilian programs are trimmed and higher borrowing pushes up debt-servicing costs. Those costs are expected to absorb about 9.4% of federal expenditures in 2027 and rise further by 2029, according to Reuters. Boris Grozovsky, a columnist for Important Stories, described the budget as evidence that the Russian government is running out of fiscal room. “There’s not enough money,” he wrote, arguing that the government is increasingly signaling that scarce funds will be directed first toward its most politically important priorities. For Moscow, the draft makes clear what remains at the top of that list: sustaining Russia’s war machine. Kyiv Post is Ukraine’s first and oldest English news organization, reporting since 1995. Its international reach – 97% of readers are outside of Ukraine – make it truly Ukraine’s global voice.