Russia plans to spend 17.1 trillion rubles, or about $202.6 billion, on defense in 2027, marking a 27 percent increase over the amount originally budgeted for that year. The draft federal budget, made public this week, prioritizes the ongoing conflict in Ukraine at the expense of domestic programs.

Social policy funding, which includes pensions, veteran payments, and maternity benefits, will drop by 7 percent compared with prior plans. Education allocations face a 6 percent reduction, while healthcare spending declines by 6.8 percent. Funding for the national economy, covering infrastructure and agricultural subsidies, shrinks by 7.4 percent.

The shifts come as Russia projects a budget deficit exceeding 5.5 trillion rubles, or roughly $66 billion, for 2027. Officials expect similar shortfalls in 2028 and 2029. The government will finance these gaps through increased domestic borrowing, with public debt rising amid high interest rates.

Defense outlays will consume about 35 percent of total federal spending next year, the highest share since Soviet times. Much of the military spending remains classified. The Kremlin has already announced tax increases to help cover costs.

Russian authorities have stated that victory in Ukraine takes precedence over other expenditures. The new budget reflects revisions from earlier projections that anticipated lower military costs. Non-military civilian spending outside protected categories has already faced sharp reductions in recent months.

Analysts note that the structure places two rubles toward the military and security forces for every ruble directed at welfare, schools, and hospitals. The approach sustains the war effort but strains resources available for ordinary Russians.