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By Brendan Cole
Senior Reporter
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Moscow's latest military spending plans shows that Vladimir Putin is no mood for peace in Ukraine, an expert on the Russian economy has told Newsweek.
Amid stalled U.S.-led ceasefire efforts in Ukraine, a draft Russian government budget revealed that spending on defense and security would continue apace between 2026 and 2028.
Alexander Kokcharov, geoeconomics analyst for Russia, Eastern Europe and Central Asia at Bloomberg Economics, told Newsweek the continued diversion of resources to fund its war suggests Moscow is not preparing for peace, but "rather for more fighting on the battlefield in Ukraine."
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Why It Matters
Since the start of its full-scale invasion of Ukraine, Russia has increased military spending to record levels on missiles, drones and salaries to build up its forces.
The high spending has added strain to Russia's sanctions-hit economy whose Finance Ministry has proposed raising VAT from 20 percent to 22 percent next year. Continued high military expenditure shows the Kremlin’s priorities which could be politically tricky as Russians face high inflation.
What To Know
Russia's government plans for defense spending published Monday showed Moscow’s continued commitment to high military spending as Vladimir Putin wages his war on Ukraine and European allies warn of future aggression in the wider region.
Reuters reported that 13 trillion rubles ($157 billion) had been proposed for defense in 2026, which was more than the 12.6 trillion rubles noted in preliminary Finance Ministry documents, but below this year's post-Soviet high of 13.5 trillion rubles.
But the lower target has raised questions. Some 84 percent of the defense budget is classified and actual military spending can be hidden within other types of expenditure, Reuters reported. Public materials also show 30 billion rubles in additional capital for PSB, a bank serving the military-industrial complex, the agency noted.
Kokcharov, from Bloomberg Economics, told Newsweek that experience since the start of the full-scale invasion in 2022 suggested that actual defense spending could be increased when needed.
He said the high share of Russia's budget for the military showed the Kremlin's prioritization of military methods of dealing with the neighbors, most notably Ukraine.
The high military spending showed that Russia was not preparing for peace, but rather for more fighting on the battlefield in Ukraine, Kokcharov added.
Russia's Finance Ministry has proposed raising value-added tax (VAT) to 22 percent from 20 percent in 2026 to fund military spending and help curb the budget deficit.
Total spending on national security in Russia, which includes the country’s armed forces, police and special services next year will amount to 16.84 trillion rubles, or 38 percent of all expenditure, The Moscow Times reported.
Ukraine has also accelerated its own military spending which in 2025 was $54 billion, or 60 percent of the country's budget, although it relies heavily on Western military and financial aid.
What People Are Saying
Institute for the Study of War: "The draft budget projects that defense spending will increase to 13.6 trillion rubles ($164 billion) in 2027 and then decrease to 13 trillion rubles ($156.5 billion) in 2028."
Alexander Kokcharov, geoeconomics analyst for Russia, Eastern Europe and Central Asia at Bloomberg Economics: "High military spending suggests that Russia is not preparing for peace, but rather is preparing for more fighting on the battlefield in Ukraine."
What Happens Next
The draft budget and the proposed VAT increase will be reviewed by the State Duma, the lower house of parliament, on October 22.
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