Russia has nearly doubled its defense budget this year to cope with the soaring cost of war, according to a new report.
Russia’s new annual defense budget for 2023 is set at 9.7 trillion rubles, or about $134 trillion in our money, Reuters reported today (April 4), based on an analysis of Russian government documents.
That’s nearly one-third of the total public budget (29.5 trillion rubles), the highest share in a decade, Reuters reported.
It also represents a roughly two-fold increase in defense spending, considering that the previously reported defense budget was 4.98 trillion rubles, or about $69 trillion of our money.
According to the document, in the first half of this year, Russia has already spent 5.59 trillion rubles, or about 77 trillion won in our money, on defense.
This amounted to 37.3% of total spending for the same period (14.97 trillion rubles), exceeding the previous annual defense budget by 12%.
Even based on the new annual defense budget, we’ve already spent 57.4% of it in the first half of the year alone.
Historically, Russia’s defense spending as a percentage of the overall budget from 2011 to 2022 has hovered between 13.9% and 23%.
The growing share of defense spending is expected to force cuts in other sectors as well, including spending on education, healthcare, and transportation, which are already shrinking.
“The military-industrial complex is driving industrial growth, and civilian industry is slowing down again,” said Dmitry Polevoy, head of investment at Russia’s Rokinvest.
Reuters also observed that the increased defense budget could increase Russia’s fiscal deficit and increase the risk of inflation.
The Bank of Russia has projected 1.5% to 2.5% GDP growth for the country this year, 카지노사이트킴 while the International Monetary Fund (IMF) predicted 0.7% growth in April.