Moscow is rewriting its fiscal priorities. The draft 2027 federal budget, reviewed by Reuters, channels 17.1 trillion roubles ($202.58 billion) into defense. That figure represents a 27% jump from the 13.5 trillion roubles originally earmarked. It marks the highest military outlay since the full-scale invasion of Ukraine began in 2022.
The trade-off is stark. Social policy spending drops by 7%, hitting state pensions, war veteran payments, and maternity benefits. Healthcare funding falls by 6.8%, and education loses 6%. Even the "national economy" category—covering roads, infrastructure, and agricultural subsidies—sees a 7.4% reduction. These cuts land as Russia’s fiscal reserves shrink and borrowing costs climb. Debt-servicing costs in 2027 are projected to spike by 21.6%, consuming 9.4% of total government spending.
The human cost is being shouldered by ordinary citizens through higher taxes and utility tariffs. These increases have angered some Kremlin supporters, particularly after their announcement followed this month’s parliamentary election. The political base that fueled the war effort is now feeling the pinch of inflation and reduced services. The federal budget excludes regional and municipal spending, which also bears a heavy share of social obligations, making the actual domestic burden even heavier than the federal numbers suggest.
The State Duma will vote on this three-year plan soon. United Russia holds a constitutional majority, ensuring passage. Authorities have repeatedly stated that winning the war takes precedence over all other spending needs. The next test is whether the public will tolerate further austerity as the war enters its fifth year.