What happened
Russia has significantly increased its defense spending, with plans to allocate 17.1 trillion rubles, approximately $205 billion, for defense in 2027. This represents a 27% increase from the original budget. The country intends to spend 50 trillion rubles, around $600 billion, on defense over the next three years. To cover these costs, Russia will raise taxes and borrow more, while reducing funding for welfare, education, and healthcare.
In contrast, despite having greater resources, Europe and the United States are not organizing their weapons production to meet the demands of a prolonged war. The European Union's 27 members are projected to spend around $515 billion on defense this year, more than twice Russia's planned spending. However, Russia's budget goes further due to lower domestic prices for military labor and equipment.
The EU is projected to spend 2.4% of its GDP on defense in 2026, compared to Russia's estimated 7.5% in 2025. Some European countries, such as Poland and Estonia, are spending a larger share of their GDP on defense due to their proximity to the Russian threat. The European Defence Agency has warned that current plans are unlikely to close gaps in air and missile defense, drones, and ammunition by 2030.
The United States has proposed a $1.5 trillion defense budget for fiscal 2027, a 44% increase from the previous year. However, the production of missiles and munitions is not expected to meet the demands of a long war, with some requested missiles not expected to arrive until 2029. Meanwhile, Ukraine is facing a $27 billion gap in its war costs and is seeking assistance from its allies to cover the remaining $20 billion.
