Russia unveils record war spending amid deepening economic strain

Thursday 18 December 2025 - 11:50

By: Dakir Madiha

Russia unveils record war spending amid deepening economic strain

Russia revealed for the first time that its direct expenditure on the war in Ukraine will surpass $137 billion in 2025, a disclosure that sheds light on the mounting fiscal burden of the prolonged conflict. Defense Minister Andrey Belousov announced that the country will allocate 11.1 trillion rubles for war-related activities next year equating to just over five percent of Russia’s gross domestic product.

Mounting costs and shrinking revenues

The disclosed amount represents roughly 82 percent of the total defense budget and signals the priority Moscow places on military operations despite rising economic pressures. Ukrainian intelligence estimates that the war costs Russia about 1.32 trillion rubles monthly, or roughly $546 million daily. Nearly half of federal tax revenue and close to 40 percent of all government spending are now devoted to financing the war effort.

Government data show that Russia’s military budget has soared by 295 percent since 2021. Analysts warn that this expansion is stretching state finances thin. Regional budgets that recorded a surplus last year now face a combined deficit of about $1.5 billion. Oil and gas income still a vital revenue source fell to 530.9 billion rubles in November, down sharply from more than 800 billion rubles a year earlier.

Growing concern over sustainability

Russia’s federal deficit is expected to persist for decades, reflecting a structural imbalance caused by heavy militarization. Ukrainian intelligence described the military-industrial complex as a “black hole,” absorbing vast resources while limiting civilian investment and technological progress. Economists caution that the country’s dependence on defense manufacturing risks long-term stagnation.

Calls for greater sanctions pressure

Ukraine’s Foreign Minister Andrii Sybiha described the Russian economy as entering a recession and urged Western allies to tighten sanctions further. According to Kyiv, less than a quarter of Russian arms production remains under international restrictions. Ukrainian officials argue that stronger economic measures could accelerate internal pressure on the Kremlin to scale back its war operations.