Russia is continuing to expand its military capabilities. President Vladimir Putin has signed a new decree increasing the permitted number of soldiers in the armed forces by 15,500. At the same time, Moscow is preparing to allocate a record 17.1 trillion rubles for defense in 2027. However, the growing cost of the military is putting additional pressure on Russia’s public finances, with the government planning new taxes to help cover the expenses.
Russian army to exceed 1.55 million soldiers
Putin’s latest decree sets the strength of Russia’s armed forces at 2,441,630 personnel, of which 1,550,500 are soldiers. The decree instructs the government to ensure funding is provided to meet these levels.
This is the fourth such decision signed by the Russian president in 2026, with previous increases implemented in March, June, and July. Since the start of the year, the permissible number of soldiers has increased by a total of 47,860.
The decree itself does not specify why Moscow is increasing the number of soldiers again or how it intends to fill the new positions.
Russia plans record military budget
The planned increase in military personnel is reflected in a substantial boost to defense spending.
According to budget documents cited by Reuters, Russia aims to spend 17.1 trillion rubles on defense in 2027—approximately USD 202.6 billion.
This is about a 27 percent increase over the previously planned 13.5 trillion rubles, and would represent the highest defense allocation since Russia invaded Ukraine in 2022.
Over three years, roughly 50 trillion rubles are expected to be directed toward defense, the documents state.
Other NATO member states are also increasing their defense budgets, while the alliance pursues military modernization and draws on lessons from the war in Ukraine.
War puts pressure on Russian finances
Higher military spending comes as Moscow faces a growing budget deficit.
The forecasted Russian budget deficit for 2026 has been revised upward from 1.6 percent of GDP to 3.2 percent of GDP. Overall budget spending this year is expected to reach 48.6 trillion rubles, about 20.9 percent of GDP.
Russia also anticipates increased borrowing. Net borrowing for 2026 is set to rise by 26 percent to five trillion rubles.
The government plans to use 459 billion rubles from the National Wealth Fund to help cover part of the budget shortfall.
Moscow plans new taxes
Higher military expenditures are expected to be reflected in tax policy as well.
The Russian government plans to raise certain taxes in 2027, including the windfall tax on companies in the extraction and metallurgical sectors. According to the budget documents, this could generate around 200 billion rubles annually.
At the same time, government debt is expected to rise. In 2027, state debt is projected to reach 21.7 percent of GDP, up from 19.9 percent in 2026. Russian authorities had previously described the 20 percent threshold as safe.
Less funding to go to civil sectors
Rising defense spending is likely to affect other areas of Russia’s budget.
According to documents reviewed by Reuters, spending on social policy, education, and healthcare is expected to decrease in 2027. Social policy outlays would fall by about seven percent, education by six percent, and healthcare by 6.8 percent.
These are planned budget figures and may change during the approval process.
Troop increases come as war continues
The new decree comes as the war in Ukraine has been ongoing for more than four and a half years.
However, according to the Russian document, the increase in the number of personnel does not in itself mean new mobilization will be announced. Russia’s leadership has also rejected claims of plans for another mass mobilization.
The expansion of the army appears to be part of Moscow’s broader effort to maintain and gradually increase its military strength.
At the same time, advances in military technology are changing the way wars are fought. NATO, for its part, is investing more in drones, air defense, electronic warfare, and other technologies.
Putin increases army, but budget faces pressure
Moscow’s latest decisions underscore the continuing priority of military spending. Russia aims to spend a record amount on defense in 2027 and is raising the permitted headcount of its armed forces.
However, the cost of this policy is being felt in public finances. A growing deficit, increased borrowing, use of reserves, and planned tax hikes all indicate that the effort to finance the war is putting increasing strain on Russia’s economy.
Only time will tell whether Moscow will be able to sustain its planned defense expenditures without even more significant cuts in other areas of the budget.
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This article was translated from the original Slovak version with the assistance of AI.
