High-ranking officials have warned Russian President Vladimir Putin that spending on the war in Ukraine is becoming unacceptably high, the most serious sign of internal divisions in Moscow since the full-scale invasion began, Bloomberg news agency reported, citing sources with knowledge of the situation and according to documents studied.
According to the publication, officials from Russia’s Finance Ministry and Central Bank have warned the Kremlin that the current level of projected defence spending risks dangerously increasing the state budget deficit.
The sources noted that these officials, who have become increasingly concerned about the state of the Russian economy and the state budget in recent months, have proposed new cuts in defence spending. They warned that the country’s strained public finances would be difficult to manage without finding additional efficiencies.
But disagreements among politicians have led senior defence ministry officials and some Kremlin officials, who are determined to achieve Putin’s military goals, to insist on maintaining military spending. They argue that cutting them would severely damage the economy because many businesses depend on military-related contracts.
Some sources say Putin has asked Finance Ministry officials to find ways to cut spending in other areas of the budget before turning to the defence sector.
According to two people close to the Russian government, the Defence Ministry is not only resisting cuts, but is also demanding additional funding. They said military spending will have to be increased to cover the deficit, which will reach three trillion roubles ($36 billion) this year.
The sources say the Russian president has been aware of budget difficulties both last year and this year, so these challenges are not a surprise. The extent of any spending cuts will depend solely on Putin, as no major budget decisions are made without his approval.
Kremlin spokesman Dmitry Peskov did not respond to a request for comment.
Russian Defence Minister Andrei Belousov said that in 2025, Russian state budget expenditures “directly related to the special military operation (as Russia officially calls the war against Ukraine)” amounted to 5.1 percent of GDP – that is, the costs of the war with Ukraine can be estimated at 11.1 trillion rubles (about $137 billion).
Last June, Maxim Reshetnikov, head of the Ministry of Economic Development, said that “according to the current feeling of business, we as a whole already seem to be on the verge of transition to recession.” Economic growth, fuelled by colossal injections into the military-industrial complex, has almost stopped.