Russia is preparing for the war in Ukraine to continue for years by planning record war spending, abandoning plans to rein in military outlays.
The shift offers one of the clearest indications yet of how deeply embedded conflict has become in Russian President Vladimir Putin’s priorities, even as strain on the economy and public finances mounts. It’s also likely to ratchet up pressure on Europe, as he seeks to deter the continent’s continued support of Ukraine.
Projected military expenditures next year of 17.1 trillion rubles ($205 billion) would amount to an annual increase of more than 40% compared to this year’s planned defense outlays — actual totals remain classified — and a nearly 380% rise from the year before the war began. Officials foresee it easing only slightly to 16.6 trillion rubles in 2028 and 16.3 trillion rubles in 2029.
The trajectory is a sharp reversal from a year ago, when Moscow was planning to moderate growth in military expenditures as it sought to narrow the budget deficit and rebuild reserves depleted during the war. Instead, the new budget lands at a time when U.S.-brokered negotiations are largely stalled, European officials are increasingly warning of hybrid attacks directed from Moscow and Russia is continuing to hammer Ukrainian cities and infrastructure.
“Putin is raising the stakes,” said Kirill Rogov, the head of Re: Russia, a Vienna-based research group. He’s telegraphing that Russia “will continue investing in the war, and Europe has to decide whether it’s prepared to sustain the same level of support” for Ukraine, he said.
The change is particularly striking compared to expectations a year ago, Rogov said, when the spending plan had encouraged hopes the conflict might eventually wind down.
Putin underscored how much had changed on Thursday when he accused European officials of escalating tensions with Russia and preparing for a potential conflict later this decade, pointing to military exercises in the Baltic Sea and statements from Western politicians about the Baltic exclave of Kaliningrad. He said Russia had no plans to attack Europe but warned that any direct assault on Russian territory would force Moscow to consider using the full range of weapons at its disposal.
“We understand that we would be facing an adversary twice our size in terms of population, with major economic and military potential,” Putin said. “We don’t have that many forces and means to counter this threat. But no one has the means of destruction that Russia has today.”
The earlier fiscal trajectory was laid out at a time when U.S. President Donald Trump’s efforts to mediate talks between Moscow and Kyiv were intensifying.
Those efforts have continued into the second year of Trump’s presidency, though have yet to come close to a peace agreement. U.S. envoys held another round of talks with Putin in Moscow in September before traveling to Kyiv, though no major breakthrough followed.
The government has made clear that funding the armed forces remains at the center of its fiscal priorities. In announcing the new budget earlier this week, the Finance Ministry said resources are earmarked for weapons and military equipment, soldiers’ pay and assistance to their families, as well as modernizing of defense-industry companies.
Much of the additional military spending is likely to flow into weapons production, according Janis Kluge, an analyst at the German Institute for International and Security Affairs in Berlin.
Russia is producing large volumes of missiles and drones, while nearly five years of fighting have depleted ammunition inventories to the point that much of what is used on the battlefield now has to be newly manufactured, he said.
The commitment comes at a growing cost for Russia’s broader public finances.
The government has raised its estimate for the 2026 budget deficit to 3.2% of gross domestic product from 1.6%, while increasing borrowing and drawing further on the liquid portion of the National Wellbeing Fund.
State debt is projected to rise further in 2027 as the government again finances a higher budget gap than expected.
The uptick in war funding will put pressure on the West at a time when confrontational rhetoric between European capitals and Moscow has intensified. Russia on Wednesday warned it saw European countries aiding Kyiv as “directly involved” in the conflict, and that its forces could strike defense manufacturers outside Ukrainian territory.
Meanwhile, European officials have been warning of the risk of an intensifying hybrid campaign from Moscow that seeks to ramp up pressure on Kyiv’s allies.
The budget increase by itself isn’t evidence that Moscow is preparing for a direct war with the North Atlantic Treaty Organization, Kluge said. The main reason for the surge in costs is the changing nature of the conflict, with Ukraine effectively opening a new front by striking deeper into Russian territory and forcing Moscow to spend more on its own defenses, he said.
“Still, the possibility of a Russian attack on a NATO country cannot be disregarded,” Kluge said.
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