Russia sent a draft budget to parliament on Thursday that locks in record military spending as the war in Ukraine, now in its fifth year, continues to absorb resources. The proposal pegs war-related expenditures at roughly 17 trillion rubles in 2027, and only a bit lower at 16.6 trillion rubles the following year. The government expects a shortfall around 2% of GDP as weaker energy takings and the conflict's costs tighten fiscal space.
Covering that bill means pulling more money from across the economy. The mining and fertilizer industries are earmarked for some of the heaviest new burdens, with the state taking up to 30% of extra earnings when the ruble-calculated global average price for selected commodities climbs at least 10% above its 2025 baseline. Gold producers would face a 20% windfall tax, and officials expect the broader mining and metals levy to bring in about 200 billion rubles each year. The plan also calls for new taxes on dividends, tweaks to profit taxation, and higher collections from other sources.
Sales of seized assets are part of the funding mix, and officials see proceeds from these sales totaling 342.3 billion rubles this year. Since 2022, tens of billions of dollars in holdings tied to Russian tycoons and foreign firms have changed hands. Just last month, authorities put the local operations of Nestle AG, France's Auchan and Germany's Metro AG under temporary management. While those units remain owned by their parent companies, other takeovers have been sold on or reassigned, generating income for the state.
The government forecasts 953.3 billion rubles in 2026 from one-off and voluntary transfers - such as business payments - falling to roughly 44 billion rubles in 2027. Households will feel some of the strain too, with the RBC outlet reporting utility charges will increase by an average 11% in 2027.
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The budget makes priorities clear: wartime outlays remain high, whereas sectors such as education, culture, social policy, and healthcare are mostly unchanged or modestly reduced. For anyone with exposure to commodity producers or consumer demand inside Russia, the mix is clear - heavier levies on miners and metals, one-off inflows from asset sales, a modest deficit, and higher utility bills that could squeeze household budgets.
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