The conflict in Ukraine whatever the cost: the 2025 budget bill in Russia unveiled on Monday provides for a 30% surge in military spending next year, confirming the Kremlin’s determination to continue its offensive, despite the human cost and economical.
The publication of this text, which must be approved by the Russian Parliament in the fall before its promulgation by Vladimir Putin, comes on the day when Russia celebrates the second anniversary of the claimed annexation of four Ukrainian regions which it does not, however, control not entirely.
In a video broadcast for “Reunification Day”, Vladimir Putin reiterated that “all the objectives set will be achieved” in Ukraine.
For this, the Kremlin has decided to continue its heavy investments in the army.
Defense spending will reach nearly 13.5 trillion rubles (130 billion euros at the current rate) in 2025, according to the bill.
The national military budget had already exploded over one year by almost 70% in 2024, representing this year with security investments 8.7% of GDP according to Vladimir Putin, a first in the modern history of Russia.
Since 2022, the Kremlin has largely reoriented its economy towards the war effort, developing its military-industrial complex at high speed, in particular by recruiting hundreds of thousands of new employees.
The Kremlin anticipates a long conflict with Ukraine and does not seem concerned by the risks of increased dependence of its economy on military orders, at a time when inflation is around 9%, reducing the purchasing power of Russians. .
Vladimir Putin had in mid-September “strengthening the country’s defense capacity” and “integration of the occupied Ukrainian regions” as “priorities”.
The amount allocated for Defense will thus represent in 2025 almost a third of total federal spending and more than twice as much as “social policy” investments.
The budget dedicated to internal security, which includes the police and special services responsible in particular for repressing criticism of the Kremlin, will increase to 3,460 billion rubles (33 billion euros), representing nearly 10%. of the Russian state’s annual expenditure.
This Defense-Security combination will represent around 40% of the budget. Not to mention numerous classified investments.
1.5 million soldiers
A sign that military spending is not ready to decrease, Vladimir Putin signed a decree in mid-September ordering an increase of almost 15% in the number of soldiers, bringing it to 1.5 million.
With this new increase, 1 in 50 assets in Russia will now be in the army which, according to Russian media, would become the second largest in the world after that of China.
To “effectively” manage the army’s accounts, where corruption remains endemic, Vladimir Putin has placed an economist, Andreï Belooussov, at the head of the Ministry of Defense since May. And many officials in the Defense sector have been incarcerated.
In total, federal spending will increase in 2025 to 41.5 trillion rubles (around 400 billion euros).
To complete its budget, the government has planned on 1er next January an increase in taxes on high incomes and businesses, a way to continue financing the offensive in Ukraine and its related expenses.
Labor shortages, however, remain problematic in a large number of sectors, which is causing the national economy to overheat, to the point that the head of the Russian Central Bank, Elvira Nabiullina, recently expressed alarm at a risk, in the long term, of “stagflation”.
Faced with the Russian offensive, Ukraine, largely dependent on Western financial and military support, plans to devote more than 60% of its budget next year to defense and security.
Russian push in the East
Since the large-scale Russian attack on Ukraine in February 2022, many Ukrainian cities have been targeted by regular deadly bombings.
During the night from Sunday to Monday, the Ukrainian capital, kyiv, was targeted by a new drone attack which, according to the authorities, this time did not cause any casualties.
On the front, the Ukrainian army is on the defensive, particularly in the Donetsk region, where Russian forces are gradually advancing, who on Monday claimed the conquest of a new small town Nelipivka.
Moscow’s troops are also getting dangerously close to Pokrovsk, a mining town located on a strategic axis for the logistics of the Ukrainian army.
In an attempt to reverse the trend, Ukraine launched an attack on August 6 in the Russian region of Kursk, further north, seizing several hundred square kilometers, but without succeeding at this stage in forcing Moscow to do so. redeploy enough troops to relieve the front.