European Security — 2026-05-29

Russia Overspends on Ukraine War by 28 Billion Dollars as Military Budget Hits Record

BLUFLocked-in defense commitments make it likely that 2025 military outlays exceed 2024's 13.2 trillion rubles by mid-2026, leaving Moscow no room to retreat without risking defense-industrial instability.

The Financial Times reported on May 29 that Russia's military spending overran its budget by $28 billion during the Ukraine war 1. CEPA analyst Pavel Luzin calculated in January that 2024 defense outlays reached 13.2 trillion rubles ($129 billion), against a planned 10.4 trillion rubles ($101 billion), based on Defense Minister Belousov's December disclosure that defense took 32.5 percent of the 40.6 trillion ruble federal budget 2. A Gaidar Institute study, reported by The Moscow Times on May 20, found classified outlays reached 28.6 percent of the 2025 federal budget, or 12.3 trillion rubles ($172.2 billion), nearly double the 15.1 percent share in 2021 3. Open social policy spending fell 26.6 percent in real terms over the same period 3.

Analysis
Consecutive overruns since 2022 have locked in a spending floor that political calculus cannot breach without triggering defense-industrial instability, making it likely that 2025 defense outlays will exceed 13.2 trillion rubles by mid-2026. Classified spending, anchored to a single CEPA reconstruction and amplified but not independently corroborated by FT and The Moscow Times, already absorbs 28.6 percent of the 2025 federal budget, nearly double the 15.1 percent share in 2021. Social spending's 26.6 percent real-terms collapse leaves near-zero trade-off space on non-defense accounts. Reclassification of war-related expenditures into other categories could cause official 2025 figures to appear below the 2024 actual even as total outlays continue rising. Moderate confidence reflects Moscow's expenditure blackout, which has made independent budget reconstruction impossible since the invasion. NATO planners and Western finance ministries should retire planning horizons premised on eventual Russian fiscal constraint.

3 sources

Russia overspends on Putins war in Ukraine by 28bn - Financial Times
Russia's Year of Truth: The Runaway Military Budget - Center for European Policy Analysis (CEPA)
War Spending Pushes Russia's Classified Budget Outlays to Post-Soviet High, Study Finds - The Moscow Times