Russia: 2025 Budget Approved

Russian President Vladimir Putin (pictured) has approved the law on the country’s budget for 2025, as well as national economic planning for the period 2026-2027. As Kremlin sources stressed, the most important priorities of the Russian federal budget for the next three years will be “fulfilling the state’s social obligations to citizens, ensuring the country’s security and defense, achieving technological sovereignty, and developing infrastructure.”

In detail, Russia’s gross domestic product in 2025 should reach 214,575 billion rubles, or $2,051.23 billion (at current exchange rates). Budget revenues for 2025 are expected to total 40,296.1 billion rubles (about $378 billion) and expenditures are expected to total 41,469.5 billion rubles. In the next two years, revenue is expected to reach 41,840.9 billion rubles (2026) and 43,154.2 billion rubles (2027) respectively. Expenditures for the 2026-2027 biennium will amount to 44,022.2 billion and 45,915.6 billion rubles, respectively.

The fiscal deficit will be 0.5% of GDP in 2025, rising to 0.9% of GDP in 2026 and 1.1% of GDP in 2027. In 2024, the Central Bank of Russia estimates that gross domestic product will have to increase by 4 percent. According to the budget law, Russia’s GDP should grow by 2.5% in 2025, 2.6% in 2026, and 2.8% in 2027.

Finally, the inflation rate, after reaching 8-8.5% at the end of 2024, is expected to start falling next year, reaching 4.5% in 2025 and 4% in 2026-2027.

The armed conflict in Ukraine, aggravated by the hybrid war launched by the West against Russia, dictates its own rules, and next year Russia’s spending on national defense will increase from 10,800 billion rubles in 2024 to 13,490 billion in 2025, i.e. 6.31% of Russia’s GDP. In the period 2026-2027, defense spending should decrease and will amount to 12,800 billion rubles and 13,100 billion rubles, respectively.