NextFin News - Russia spent 5.91 trillion rubles on the military in the first quarter of 2026, equal to 46% of all federal spending, according to Janis Kluge’s budget analysis. Total federal spending reached 12.8 trillion rubles, while classified expenditures rose to 4.9 trillion rubles, or 38.2% of the budget.
This is not about a high defense line item — it is about a budget increasingly organized around war. The 2026 budget law had pointed to military spending falling to 6.2% of GDP from 7.8% in 2025, yet Kluge’s estimates show the first quarter already running at a much heavier pace. Military outlays rose 30% from a year earlier, and the main driver was classified spending, up 43% year over year to 4.9 trillion rubles. On the surface this looks like overspending against plan; the real issue is that concealed or hard-to-track war financing is expanding faster than the official budget suggests.
Kluge, a research fellow at the German Institute for International and Security Affairs, is not offering a market consensus view. His work reads more like a fiscal stress test built from Russia’s own budget arithmetic. What it really changed is the credibility of the Kremlin’s published consolidation story: if execution in one quarter already diverges this sharply from the annual target, the plan is no longer a reliable guide to the actual cost structure of the state.
The quarterly math is blunt. At 2.7 billion rubles an hour, roughly 65 billion rubles a day and about 2 trillion rubles a month, the war machine consumed more in one month than Russia spends in a year on higher education, based on the figures cited in the report. The same quarterly total exceeded the budgets of all Russian regions except Moscow. Who benefits is clear: defense contractors, military suppliers and the parts of the state tied to procurement and security. Who bears the pressure is just as clear: civilian ministries, regional governments and households that eventually absorb the costs through weaker public services, higher taxes or more inflation.
The gap between plan and execution is therefore not a technical discrepancy. SIPRI said Russia’s federal budget funding for war and other military spending reached about 16 trillion rubles in 2025, or 7.5% of GDP, and that planned military expenditure in the 2026 budget was reduced to 14.9 trillion rubles, or 6.3% of GDP, after a 2025 slowdown in real-terms growth. Reuters separately reported in late September that draft budget materials pointed to 13 trillion rubles in planned defense spending for 2026, while officials and sources familiar with the process said actual spending often exceeds targets and can be hidden inside other categories. The logic holds up because the same pattern appears from two directions: official plans show intended restraint, while first-quarter execution shows the state still allocating cash as if wartime demands remain dominant. The real trade-off is no longer growth versus austerity; it is war finance versus everything else the federal budget is supposed to fund.
Kluge noted that first-quarter military spending was equal to two-thirds of budget revenues, leaving little margin if oil prices weaken, the ruble strengthens or tax receipts cool. Reuters has reported that Moscow proposed raising value-added tax to 22% in 2026 to help fund military spending and narrow the deficit, which signals that the burden is being shifted onto consumption rather than reduced at the source. The Kremlin still has buffers: higher oil prices can lift revenue, and Russia’s budget system can absorb a great deal of opacity. But the math doesn’t add up yet if the assumption is that 2026 will bring a genuine step-down in war spending.
The risk nobody is talking about enough is that opacity itself is becoming a fiscal tool, not just a political habit. Classified spending at 38.2% of the quarterly total is high even by Russian standards, and whether this model works depends on whether revenue, borrowing and tax collection can keep matching an economy under sanctions, labor shortages and persistent inflation. The budget did not break in the first quarter, but it did reveal something more important: Moscow is not reducing the war burden in 2026. It is still absorbing it at 5.91 trillion rubles in three months, with 46% of federal spending going to the military.
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