Russia Raises 2025 Defence Budget By 25%, Highest Since Cold War

Russia is set to ramp up its defence budget by 25% in 2025, marking the highest military spending levels since the Cold War. The draft budget, submitted to the State Duma, reveals plans to allocate 13.5 trillion roubles for defence, amounting to 6.3% of the country’s GDP.

Record Defence Spending Amid Ongoing Conflict

This substantial increase comes in the fourth year of Russia’s “special military operation” in Ukraine. The 2025 defence budget will account for 32% of total government expenditure, showing a major reversal from last year’s plans to reduce defence spending. The 2025 budget prioritizes equipping armed forces, military salaries, and supporting defence industries.

Allocation for Military Personnel

Around 10% of the total defence budget will go towards military personnel payments. The minimum annual wage for frontline soldiers is set at 3.25 million roubles, the highest seen since the Soviet era.

Defence and Security Expenditure

Russia’s total spending on defence and national security will reach 17 trillion roubles, nearly 41% of the total 2025 budget. This combined expenditure is also projected to reach 8% of the country’s GDP.

Comparisons with Cold War Military Spending

The projected share of GDP for defence spending is comparable to the late Soviet years, when the USSR was involved in the Afghan conflict and maintaining its nuclear arsenal.

Social Spending in the Shadow of Military Costs

Despite rising military expenditures, Russia plans to spend significantly less on social programs, including pensions and subsidies, which will account for 6.5 trillion roubles in 2025. Comparatively, healthcare and education will receive only 1.86 trillion and 1.58 trillion roubles, respectively.

Declining Oil and Gas Revenues

Meanwhile, the Russian government expects a decrease in oil and gas revenues in 2025, with income from these sectors projected to decline to 10.9 trillion roubles, representing just 5.1% of GDP. Finance Minister Anton Siluanov highlighted the positive shift away from oil and gas dependency in Russia’s budget, with these revenues making up 27% of total budget income.

Projected Budget Deficit

The 2025 budget deficit is expected to be 0.5% of GDP, a reduction from the 2024 projected deficit of 1.7%, which had been revised upward from earlier estimates.

As Russia strengthens its military focus, the economic balance between defence, social spending, and oil revenues will remain a crucial aspect of the country’s fiscal policies in the coming years.