Russia plans to slash social spending to fund record military budget in 2027

Russia's upcoming 2027 budget proposes a substantial cut in social policy spending, including a 7% drop in pensions and veteran benefits, and similar reductions of about 6% in both education and healthcare. At the same time, the defence budget is set to hit a record 17.1 trillion rubles, up from 12.1 trillion rubles planned for 2026. Debt-service obligations will rise 21.6%, reaching 9.4% of total spending in 2027 and climbing further by 2029.

To finance the gap, the government plans new taxes, such as a levy on excess metallurgical profits, a progressive tax on passive income and higher taxes on mutual-fund gains and foreign e-commerce. Early data suggest that actual military spending in 2026 is already surpassing the original budget. The reallocation reflects a clear prioritisation of defence over social services.