Russia's Record Defence Budget and Its Economic Impact

Russian President Vladimir Putin has approved a 2025 budget that allocates an unprecedented $126 billion (13.5 trillion rubles) for national defense, accounting for 32.5% of the total government expenditure. This marks a significant rise from the previous year's record, which stood at $28 billion less. The defense spending is now over 6% of Russia’s GDP, reflecting the country’s deep commitment to its military amidst the ongoing war in Ukraine. This marks a shift in priorities, with Russia dedicating more resources to the war effort than to education, healthcare, and social welfare.

This massive budget allocation underscores the intensity of the ongoing conflict with Ukraine, which has become Europe's largest war since World War II. Despite Russia's larger and better-equipped forces, the conflict has strained both Russia's economy and its population. High inflation and labor shortages have further challenged the country’s economic stability. In response, the Russian Central Bank raised interest rates to 21%, the highest in decades, in an attempt to manage the economic pressures.

Interestingly, the defense budget projections for the next few years show a slight reduction in military spending, with expected allocations of $114.9 billion in 2026 and $122.4 billion in 2027. This could indicate an easing of the economic burden in the future, though the situation remains volatile.

On the other side of the war, Ukraine continues to receive substantial military support from Western nations. Germany recently pledged over half a billion dollars in new military aid for Ukraine, with deliveries scheduled for December. The continued flow of support to Ukraine remains a crucial factor, especially as questions arise regarding the future of U.S. assistance under President-elect Donald Trump’s administration.

The situation remains fluid, and how both sides manage their military expenditures and economic challenges in the coming years could shape the outcome of the war. Russia's record defense budget signals the prolonged nature of this conflict, which has exacted a heavy toll on both nations.

Refrence From: www.ndtv.com