Russia to Overshoot Military Spending by $28 Billion; Finance Ministry Eyes Freeze on Non-Defense Budget Items.

Russia’s 2023 Military Expenditures

According to UATV: Russia is projected to exceed its original military budget by $28 billion in 2023, placing significant strain on the country’s public finances. In response, the Russian Ministry of Finance has proposed freezing a portion of non-defense spending to offset the rising costs of the war.

On May 29, 2023, the Financial Times reported that Russia’s military spending had surpassed initial targets. According to estimates from Russia’s Ministry of Finance, the overshoot in military expenditures is expected to reach roughly 2 trillion rubles (about $28 billion) in 2026. Similar overspending is anticipated in 2027 and 2028. To manage this, the Finance Ministry has suggested freezing non-defense expenditures at the following levels:

• 2.9 trillion rubles in 2026,
• 5.4 trillion rubles in 2027,
• 7.1 trillion rubles in 2028.

Approximately 16.84 trillion rubles (around $238 billion) have already been allocated to defense and security agencies, accounting for nearly 40% of federal spending. Over the first four months of 2023, the federal budget deficit reached 5.9 trillion rubles (roughly 2.5% of GDP). While the initial 2026 plan had projected a deficit of 3.8 trillion rubles, GDP growth forecasts for that year have now been downgraded to just 0.4%.

'Reserves are not infinite.' Anton Siluanov, Russian Finance Minister

This surge in military outlays—driven by Russia’s ongoing war of aggression—poses serious economic challenges for the country. Freezing non-defense spending could affect social programs and infrastructure projects, potentially sparking public discontent. The widening budget deficit and lowered GDP growth projections underscore the urgent need for fiscal stabilization. These developments may also have long-term implications for Russia’s political landscape.