Military spending accounted for an unprecedented 65.26% of the russian federation’s federal budget revenue in the first quarter of 2026, according to calculations by Janis Kluge, a research fellow at the German Institute for International and Security Affairs, based on data from the Ministry of Finance.
In January–March, the treasury received RUB 8.309 trillion in revenue: of which RUB 1.443 trillion came from oil and gas (-45% year-over-year) and RUB 6.866 trillion from non-oil and gas sources (+7%). Meanwhile, RUB 5.908 trillion was spent on the war—30% more than in the first quarter of 2025, and five times higher than the January-March figure for pre-war 2021.
This means that military spending was equivalent to two-thirds of budget revenues, which were hit at the start of the year by new oil sanctions, a strong ruble, and an economic slowdown, Kluge notes.
These figures look “staggering,” and the kremlin’s views are likely a cause for concern, he emphasizes.
Despite tax hikes, the cost of the war is “eating up” an ever-larger share of the rubles flowing into the budget each year. For comparison, last year it was 43.34%, in 2024 – 39.05%, in 2023 – 32.05%, and in 2022 – 24.51%. In pre-war 2021, 18.44% of budget revenues went to defense spending, according to Kluge’s calculations.
He believes it is possible that the surge in military spending is linked to the fact that the russian Ministry of Finance shifted part of last year’s expenditures to this year’s budget to avoid showing a massive deficit and to stay within a budget that had to be increased fivefold over the course of the year—from RUB 1.2 to RUB 5.8 trillion. But as a result, military spending in early 2026 exceeded the budgeted level by nearly double—12% of GDP versus 6.8% of GDP.
When drafting the budget, officials at the russian Ministry of Finance were counting on a possible deal regarding Ukraine with Donald Trump in the second half of the year, sources familiar with the situation told Bloomberg. According to them, the economic bloc warned vladimir putin that the budget deficit could reach alarming levels if military spending was not curbed.
However, the russian Ministry of Defense opposed this, as it needs not only to retain the funds allocated in the budget but also to increase funding for the military.
Putin, according to Bloomberg sources, sided with the military and instructed the russian Ministry of Finance to prepare cuts to all budget items except for defense spending. According to the FT, civilian spending could be frozen by RUB 3 trillion this year and by more than RUB 7 trillion in the three-year budget.
Initially, the russian Ministry of Finance planned the 2026 budget, expecting last year’s deficit of RUB 5.8 trillion to decrease to RUB 3.8 trillion through increases in VAT and taxes on small businesses. In reality, by the end of May, the “hole” in the treasury had reached RUB 6 trillion—more than for the entire previous year.
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