Russia plans to significantly ramp up military spending next year as its invasion of Ukraine falters and a presidential election looms, Bloomberg reported, citing a draft budget submitted to parliament on September 22.
Russia intends to allocate 10.8 trillion rubles ($112 billion) to military needs next year, a jump by two-thirds compared with 2023, Bloomberg reported.
If the plans materialize, military spending will account for 6 percent of gross domestic product (GDP), Bloomberg calculated, making it the largest item in the budget.
Russia’s 19-month-long invasion of Ukraine is struggling, requiring the Kremlin to allocate ever more money to the military to prevent a rollback if not an outright defeat.
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Ukraine’s Western-backed forces have been making minor gains since its latest counteroffensive began in June. Any major Ukrainian victories in the coming months would be a blow to President Vladimir Putin, who is expected to run for reelection in March 2024.
While there is little doubt Putin will win the tightly controlled election should he run, setbacks could nonetheless make the election more problematic for the Kremlin.
To appease the population ahead of the election, Putin will also boost social spending by 1 trillion rubles ($10 billion), Bloomberg reported, citing the draft budget.
Another 11 trillion rubles ($114 billion) in spending next year is classified. That budget line item is also up two-thirds from last year.
Russia anticipates budget revenues will jump by more than a fifth next year, keeping the budget deficit below 1 percent.
Russian budget revenue is highly dependent on oil prices, which have rallied more than a quarter over the past three months, surpassing $90 a barrel.
Analysts forecast oil prices to remain high in the near-term.