Russian President Vladimir Putin approved the federal budget for 2024-2025 on Monday, which included a massive 70 percent increase in “national defense” spending compared to 2023, which now amounts to almost a third of its total budget.

The total budget of RUB 36.6 trillion ($411.7 billion) also marked an overall 25 percent increase compared to the current year with only a $17.9 billion estimated deficit, which has led to questions on the effectiveness of Western sanctions as Russia continues to generate revenue through oil exports.

As reported by The Moscow Times, Russia’s upcoming budget for “national defense” amounted to RUB 10.7 trillion (approximately $120 billion), which marked a 70 percent increase from the current year’s RUB 6.8 trillion (approximately $76 billion).


In comparison, Ukraine’s defense budget for 2024 has reached upwards of $54.8 billion, according to an earlier Kyiv Post report.

In its 2024 budget, Russian funding for education and medicine remains numerically unchanged which, when inflation is taken into account, means a slight reduction in real terms.

However, the budget for Russian national healthcare is expected to be reduced by 10 percent, with a sharp reduction – almost 50 percent – in children's healthcare development in particular, dropping from RUB 19.5 billion ($219 million) to 10.2 billion ($114 million).

The last time Russia’s defense budget occupied a third of its total budget was towards the end of the Soviet Union when the budget listed under “military purposes” reached 29.4 percent of the total budget for 1990, according to a declassified document.

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This could be interpreted as Russia’s intention to transition the economy to a “war footing” – a constant demand among Russian milbloggers – as officials from both Ukraine and Russia have expressed concerns about the ongoing war entering a “stalemate.” 

It might also indicate Russia’s preparations for a potential conflict with the West – a “wholesale remilitarization of Russian society,” Richard Connolly, an expert at the Royal United Services Institute in London, said in an AP News interview.


The budget was also released ahead of the Russian presidential election, which is due in March 2024, and it could be seen as the Russian government’s attempt to demonstrate its willingness to achieve a swift victory in its war in Ukraine and shore up support among the Russian population.

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Putin is bluffing like he always does. Yes, he will spend the money, but it does not mean anything. His economy is being hollowed out. Russia is becoming unstable, and he is making is so.

I am an economist.

The acid test is, would you personally take the Ruble as a currency to hold for value for your future savings? If not, chances are others would not.

Economies are complex and can not be legislated with the stroke of a pen. People are motivated by enlightened self-interest, and the calculation of profit and loss is a complex array of intertemporal values. The longer he rules top down the more unstable his economy is becoming. You will see. Light wins over darkness.