Putin adds $60B to war budget as talks stall, report says

According to Bloomberg News, Russia's military spending will hit a record this year. Vladimir Putin has added almost $60 billion to the defense outlays in the budget after deciding that US-brokered talks would not produce a deal on Ukraine that Moscow could accept.bloomberg+1

Two people close to the government told Bloomberg that defense spending will approach 17 trillion rubles (about $199 billion) by the end of 2026. That is about 40% more than the plan the government announced at the end of 2025. The people asked not to be named because the information isn't public. The figure is close to the amount set for next year in the budget officials released last week.theprint

A reversal after Alaska

A year ago, the Kremlin planned to slow the growth of military spending so it could narrow the deficit and rebuild reserves. Putin met President Donald Trump in Anchorage, Alaska, in August 2025, and afterward he hoped a peace agreement might come in 2026, one of the people said. By January, though, the Kremlin had decided that a deal was out of reach. The government then sped up advance payments to defense companies and increased other war-related spending, the person said.theprint

The result, according to Bloomberg, is a projected 2026 deficit of more than 7 trillion rubles, compared with the 3.8 trillion rubles originally expected. The extra spending has been paid for with more domestic borrowing and gold sales. The Finance Ministry did not respond to Bloomberg's request for comment.theprint

Official numbers give only part of the picture. Reuters reported that the 2026 budget planned 12.1 trillion rubles for defense, that the actual amount is classified, and that some military costs are recorded in other parts of the budget. Bloomberg reported in June that officials were planning to add another 4 to 5 trillion rubles to this year's war spending.reuters+1

Years of war budgeted

Draft budget documents seen by Reuters show Russia plans to spend 17.1 trillion rubles on defense in 2027. That is about 27% more than previously projected and the highest figure since the full-scale invasion began in 2022. Defense would make up more than a third of federal spending and would exceed the combined budgets for healthcare, education and social welfare. Spending is set to ease slightly to 16.6 trillion rubles in 2028 and 16.3 trillion rubles in 2029. Bloomberg's sources said actual spending next year could also exceed the target.taipeitimes+2

Analysts have made the same point. "Actual spending on defence is classified and could rise even further," said Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis.taipeitimes

Tensions with Europe are rising at the same time. Last week Putin accused European officials of preparing for a possible conflict later this decade. He said Russia did not plan to attack Europe but warned of its weapons: "No one has the means of destruction that Russia has today. And these are our competitive advantages".theprint