Russian lawmakers today approved a first reading of the 2025-2027 budget bill, which calls for a 30% increase in military spending next year, in line with the Kremlin’s policy of focusing on the war effort.
According to official results, in the lower house of the Russian parliament (Duma), 314 deputies voted in favor of the three-year budget, 78 abstained and one was against.
The text, which has a second reading scheduled for November 14, must be approved by the Federation Council (Upper House) before its promulgation, which is already considered certain by Russian President Vladimir Putin.
The Kremlin (Russian President) often declares that the offensive against Ukraine, launched on February 24, 2022, will be successful, regardless of the economic and human costs, despite the West’s support for Kiev.
Last September, Vladimir Putin was clear about this goal, saying that “strengthening the country’s defense capability” and “unifying the occupied territories of Ukraine” were “priorities.”
To achieve this, the Kremlin decided to continue investing heavily in the military.
Defense spending will reach nearly 13,500 billion rubles (about 130 billion euros) by 2025, according to the bill.
The national military budget has already increased by 70% in one year, and in 2024, this year represents, with investments in defense, 8.7% of the country’s gross domestic product (GDP), according to Vladimir Putin, an unprecedented amount in modern Russian. History.
Starting in 2022, the Kremlin will focus the bulk of its economy on the war effort and exponentially upgrade its military-industrial complex, notably by recruiting hundreds of thousands of new employees.
The Kremlin expects a protracted conflict with Ukraine and is unconcerned about the risks of its economy’s heavy reliance on military orders at a time when inflation is eroding Russians’ purchasing power at more than 8.6%.
The budget dedicated to internal security, which includes the police and special security services, will increase to 3,460 billion rubles (about 33 billion euros), which is almost 10% of the Russian government’s annual spending.
This defense-security mix would represent about 40% of the budget, excluding the government’s many secretive investments.
In a sign that military spending will not decrease, Vladimir Putin signed a decree in mid-September ordering a nearly 15% increase in the number of soldiers, bringing it to 1.5 million.
With this new increase, one out of every 50 active personnel in Russia will now be in the military, according to Russian media, making it the second largest in the world after the Chinese army.
In total, federal spending will increase to 41,500 billion rubles (about 400 billion euros) by 2025.
To balance the budget at the level of growth, the Russian government plans to increase taxes on high-income earners and companies starting January 1, which continue to finance the offensive in Ukraine and related costs.
But structural problems persist in the economy of the Russian Federation. Along with inflation, labor shortages – a direct result of hundreds of thousands of men leaving for the front or abroad – are “limiting” growth, according to Vladimir Putin.
However, the situation is stable in the short term.
On Tuesday, the International Monetary Fund (IMF) raised its year-end growth forecast for Russia to +3.6%.
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