Russia’s federal budget expenditures on the war with Ukraine in the first half of 2026 reached a new record high of 10.687 trillion rubles, according to calculations by Janis Kluge, a research fellow at the German Institute for International Security Studies, based on data from the Ministry of Finance.

Compared to the same period last year, spending on the military and weapons production increased by another 30%, or 2.46 trillion rubles. Compared to January-June 2024, the Russian military budget increased by 65% ​​(+4.211 trillion rubles), by 145% compared to 2023, and by 285% compared to the first year of the war. Compared to the pre-war 2021, military spending has jumped more than fivefold.

On average, the Kremlin’s “war machine” “ate” 1.78 trillion rubles per month, 59 billion rubles per day, or 2.5 billion rubles every hour.

According to Kluge, 43.8% of all federal budget expenditures were spent on military spending in the first half of the year, a “new all-time high.” Compared to budget revenues, the figures appear “even more extreme,” he emphasizes : 57.3% of all budget revenues went to funding the army and the defense industry. By comparison, the year before, 39.2% of budget expenditures and 46.8% of budget revenues were spent on the war; before the war, the figures were 20% and 19.8%, respectively.

Exactly two-thirds of Russia’s military budget is classified, according to Kluge’s calculations: in the first six months, the Kremlin spent only 3.546 trillion rubles on open defense items, and 7.141 trillion on classified ones. Compared to last year, “shadow” treasury spending has increased by 42%, and compared to the pre-war period, it’s more than sevenfold.

Cumulatively, since the beginning of 2022, the Kremlin has spent 57.144 trillion rubles on the military and weapons procurement, or $660 billion at the current official exchange rate—an amount comparable to the entire gold and foreign exchange reserves of the Central Bank ($720.3 billion as of August 1) and 2.2 times the value of the country’s entire gold reserves ($292.8 billion).

In the 2026 budget law, the Russian government initially budgeted defense spending at 6.7% of GDP, but in reality, it exceeds the plan by approximately 1.5 times, reaching 10.5% of half-yearly GDP in six months, according to Kluge’s calculations. The result is a growing budget deficit, which by early August reached 6.45 trillion rubles, double the planned level for the entire year.

To balance the treasury, which has experienced a significant decline in oil and gas revenues for the second year in a row, the government has cut civilian spending by a third since spring and ordered a 15% reduction in the workforce in government agencies, sources familiar with the situation told Bloomberg. According to them, the Finance Ministry’s internal calculations showed that the budget “hole” could widen to 9 trillion rubles by the end of the year unless sequestration is initiated. 

(C)THE MOSCOW TIMES 2026