Russia’s Military Spending Set to Reach Record $199 Billion in 2026

Russia is heading toward a record military bill of almost $200 billion this year after President Vladimir Putin authorized nearly $60 billion in additional spending.

Defense outlays are forecast to reach about 17 trillion rubles, or $199 billion, by year-end, according to two people close to the government who spoke to Bloomberg.

That would put expenditure roughly 40% above the government’s original 2026 plan.

Peace Expectations Unravel

The spending increase followed a reassessment of negotiations with Washington.

After meeting President Donald Trump in Anchorage in August 2025, Putin expected an agreement might be achievable in 2026, according to one person.

Those expectations had shaped plans to restrain military spending growth, reduce the deficit, and replenish reserves drawn down during the war.

By January, however, the Kremlin had decided that U.S. mediation had not produced a breakthrough and that an agreement with Ukraine was beyond reach, the person said.

The government accelerated advance payments to defense manufacturers and increased other war-related spending from the beginning of the year.

Borrowing and Gold Sales

The additional expenditure has helped lift Russia’s projected 2026 budget deficit above 7 trillion rubles.

The original forecast was 3.8 trillion rubles.

Domestic borrowing and gold sales have financed the increase, placing further pressure on a budget that officials had previously intended to bring closer to balance.

This year’s anticipated military bill is already approaching the allocation announced for 2027 in budget proposals unveiled last week.

Those plans set defense spending at 17.1 trillion rubles next year, followed by modest reductions to 16.6 trillion rubles in 2028 and 16.3 trillion rubles in 2029.

Actual expenditure in 2027 could again exceed the budget, the people said.

Moscow has become increasingly doubtful that the Trump administration can secure an agreement acceptable to Russia.

Fighting Intensifies

Russia has increased its attacks in Ukraine since the summer, deploying missiles and faster drones against energy facilities, transport networks, hospitals and other civilian infrastructure.

Recent strikes have repeatedly hit civilian targets in Kyiv, while drones have also been used in attempts to attack the capital’s bridges.

Attacks on vessels near Black Sea ports have become almost daily as Ukraine has intensified its own strikes.

The higher spending also comes amid growing tensions with European governments.

Last week, Putin cited Baltic Sea military exercises and statements concerning Kaliningrad as evidence that European officials were preparing for a possible confrontation.

He denied plans to attack Europe but warned that a direct assault on Russian territory could prompt Moscow to consider its entire weapons arsenal.

“We don’t have that many forces and means to counter this threat. But no one has the means of destruction that Russia has today. And these are our competitive advantages.”