Defence investment has increased sharply since Ukraine invasion, German intelligence agency says
Jörg Luyken is a Berlin-based journalist and writer of the German Review, a weekly newsletter on German current affairs
04 February 2026
Russia spent about half of its state budget on its military last year, according to an analysis by Germany’s foreign intelligence agency.
The Bundesnachrichtendienst (BND) also found that Russia’s real defence spending was 66 per cent higher than officially declared, with expenditure rising sharply every year since the country’s full-scale invasion of Ukraine in 2022.
According to the analysis, the Kremlin’s true military outlay was approximately €250bn in 2025, equivalent to roughly half of total state spending and about 10 per cent of the country’s GDP.
At the start of the war, military expenditure accounted for about 6 per cent of GDP.
The BND said the funds were being used not only to sustain the war in Ukraine but also to expand military capabilities beyond the battlefield, particularly along Russia’s borders with eastern Nato countries.
Western officials, including Mark Rutte, Nato’s secretary-general, have warned that Russia could attack one of the alliance’s memberswithin two to five years.
According to local media, the BND report said: “These figures clearly demonstrate the growing threat to Europe posed by Russia.”
The agency found that much of the additional spending, including on construction projects, military IT programs and social benefits for armed forces personnel, was hidden elsewhere in the state budget.
Russia has a much narrower definition of defence spending than that used by Nato, while the Kremlin also systematically distorts official figures, the BND said.
Moscow’s budget plans for 2026, released last autumn, suggested defence spending would fall for the first time since the war began. However, the official figure of 13 trillion roubles (£123bn) is far below what German analysts believe the Kremlin is actually spending.
The rising cost of the war and a slump in revenues from energy exports has forced the Russian government to slash social welfare spending and raise VAT, while running a large budget deficit – estimated at more than $70bn (£51bn).
Last year, in contrast, the Stockholm International Peace Research Institute estimated that Russia’s total defence outlay was around 7 per cent of GDP, a level it described as “manageable”
Even by the Kremlin’s figures, Russia now has the third-largest defence budget in the world, behind the United States and China. Its military spending has more than doubled in the past five years.
The scale of Russia’s rearmament has, in turn, pushed Western Europe into its largest military build-up since the Cold War.
Germany, for example, is set to double its pre-2022 defence budget, with Berlin aiming to have its armed forces ready to fight a conventional ground war by 2029.
Fresh talks in Abu Dhabi
The BND’s report came as Moscow demanded Kyiv accept its conditions to end the four-year-war or face a continuation of the conflict. It came ahead of fresh negotiations between the two sides in Abu Dhabi.
The US-mediated meeting is the latest in a series of talks that have so far failed to result in any agreement to end the fighting.
The war has spiralled into Europe’s deadliest conflict since the Second World War, with hundreds of thousands killed, millions forced to flee their homes, and much of eastern and southern Ukraine decimated.
The Kremlin’s hardline rhetoric in the run-up to the talks, coupled with significant air strikes on energy facilities amid below-freezing temperatures in Ukraine, has threatened to overshadow the latest talks.
Speaking on Wednesday as the latest negotiations got under way, Dmitry Peskov, the Kremlin spokesman, told reporters: “Our position is well known.
“Until the Kyiv regime makes the appropriate decisions, the special military operation continues.”
Comment from :
Gert Rasmussen
A psychopathic 12th Century warlord ruling and destroying a once proud nation. In the 21st Century it seems obvious Putin clearly missed his true era.
Ian Jones
You have to question the figure of 1.5m put on Russian personnel. They’ve been struggling with their current situation, draining prisons, press-ganging Russian citizens, bribing foreigners with false promises, putting amputees back on the frontline- the list goes on.
Thomas Glover
Reply to Ian Jones –
And that is why with an official figure of 2.3% unemployment prices are rocketing up because employers are competing with the military for what workers are left “on the market”.
A lot of the “Russia is winning” posters on here pretend that Russia has SO many men it will always come out on top. But they conveniently forget that for every man on the front line there needs to be, at a guess, 5 or far more behind them working to produce weapons, ammunition and food. Let alone running hospitals, schools, police (important in Russia that one!) and even parasitically working in the government.
There have been some posts here earlier trying to make the point that Russia is still standing. OK, in my view, not so surprising considering they never needed to go to war in the first place but moving on…
This makes for an interesting read.
https://meduza.io/en/feature/2026/02/02/as-food-prices-surge-russians-stop-buying-fruit-ignore-expiration-dates-and-brace-for-more-hikes
Hilary Deighton
Putin has painted himself into a very insecure corner where he is playing with a tottering house of cards. We must keep supporting Ukraine unstintingly so that the insecure position vanishes and the insecure structure falls.
Trevor Smallwood
Reply to Hilary Deighton
He has lost already HD. Ukraine aren’t going to give him the fortress cities. It’s just a matter of how he falls.
gw.london
Hello,
I genuinely feel it is time these cowardly leaders we have in Europe were knocked into shape by one STRONG individual leader, someone to take charge (Not Mark Rutte, he has not got the courage) and directly confront this EVIL dictator Vladimir Putin, And told him directly. F–k all your silly threats about your going to do this or your going to do that.
Forget Donald Trump and his half baked deals that actually leave Ukraine with nothing. All of this shiny cuff linked fast talking deals that “his man on the ground” Steve Witkoff keeps coming up with. It is all hot air, he should go back to selling “real estate” in Florida instead of trying to sell Ukraine to a dictator, who is calling the shot’s.
That man hasn’t got the right to tell anyone what to do, and in fact should be locked up as a War Criminal.
Europe needs to stand up, tall and proud, and confront this evil bas—d. Europe has got more than enough men and firepower to go and give the Russian Military the “hiding of a lifetime”. Give Ukraine the RIGHT weapons, but most importantly have 3-4 strong military powers from Europe join the fray. With the right air cover (it is all available) and boots on the ground, Russia will. fall in a matter of weeks. Start off by taking the War to Russia, knock out all the power in Moscow, let them start feeling what it is like trying to survive in minus 20 degrees with no heating or light.
Putin is only getting away with what he is doing as he is betting (certain) that no one in Europe has got the bottle to directly “hit him on the chin”.
Believe me I know he would fall in a matter of weeks. But this time on our terms, and that is “get all Russian boots out of Ukrainian Sovereign Territory including Crimea”.
CONFRONT THIS WITH STRENGTH, WE WILL WIN.
David Watts
Philip Clayton
It should be noted that by 1939 Germany had committed so heavily to armament spending that it had almost no option but to start a major land war. Sustained peace would have led to inevitable economic collapse. That is where Russia is now: a dictator committed to territorial expansion with an economy that will not survive peace.
Best we dig in.
Ivailo Partchev
Dear DT, positions in Ukraine are not enemy positions, they are positions in a martyrised country suffering under Pootin’s assault.
H Forster
Watched Our Man in Moscow- Steve Rosenberg. Very enlightening and such a shame how Russia has gone down this dreadful road of confrontation against what seems like the entire West and everyone else. His description of the two headed eagle was very apt.
Kasper Christiansen
The US is essentially now just an armsdealer with a president – who’s trying to exploit the attack on Ukraine to make business deals benefitting himself personally – and business deals that must eventually be paid by Ukraine and EU.
If EU, UK & the rest of Europe does not step up and take over the “negotiations” from the armsdealer, then it’s going to be extremely expensive – both in monetary terms and in human costs.
Many good comments again, and especially David Watts said what we’ve been saying. What we need is another Churchill. What we have instead are fluffy bunnies no one can coax out of their bunny holes.