The report estimates that at 12 765 billion roubles (around US$140 billion), Russia’s planned military spending in 2024 would be 29 per cent higher in real terms than in 2023, representing 7.1 per cent of gross domestic product (GDP) and 35 per cent of all government expenditure.
According to the most recent available draft of the budget law, while military spending increases, allocations to the budget chapter ‘National economy’ fall from around 14 per cent of total spending in 2023 to 11 per cent in 2024. This is despite economic challenges such as the impact of international sanctions and Russia’s rising debt burden. Allocations to some key social spending chapters also decrease as a share of total spending compared with 2023, including ‘Housing’ (from c. 2.8 to 2.2 per cent), ‘Education’ (from c. 4.8 to 4.2 per cent) and ‘Healthcare’ (from c. 5.2 to 4.4 per cent). Full details of the budget will probably not be made public until the end of the year.
The new budget plans assume a 22 per cent nominal increase in government revenues during 2024. This optimistic forecast relies on sizeable increases in revenues from oil and gas and other economic activity and thus seems vulnerable to tightening international sanctions, a deteriorating global economy or weaker domestic economic performance.
‘With planned reductions in military spending in 2025–26 after a sharp increase in 2024, and with the Russian presidential election due in 2024, Putin appears to be showing his intent to bring the war to a successful conclusion within the year,’ said SIPRI Director Dan Smith. ‘There currently seems to be little prospect of a significant military breakthrough in Ukraine for either side. While Putin may be counting on the West’s support for the war fragmenting, the West is counting on the war bankrupting Putin’s regime. Neither assumption is a sure thing, neither is impossible.’
Other findings of the SIPRI report include:
- Transparency is declining both within the Russian federal budget and in reporting of actual spending during the year.
- War-related spending is not limited to military spending and includes, for example, spending on absorbing occupied territories in Ukraine and rebuilding war-damaged structures on Russian territory.
- Some of the increased spending could be intended to relieve debts accumulated by Russian arms producers.