Russia: military spending to explode in 2025 to continue offensive in Ukraine

The conflict in Ukraine at all costs: the 2025 budget bill in Russia unveiled on Monday foresees a 30% surge in military spending next year, confirming the Kremlin's determination to continue its offensive, despite the human and economic cost.

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 that it does not, however, fully control.

In a video released for “Reunification Day”, Vladimir Putin thus repeated that “all the objectives set will be achieved” in Ukraine.

To this end, the Kremlin has decided to continue its heavy investments in the army.

Defense spending will reach nearly 13,500 billion 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 nearly 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, rapidly developing its military-industrial complex, 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%, cutting into the purchasing power of Russians.

Vladimir Putin had raised in mid-September “the strengthening of the country's defense capacity” and “the integration of occupied Ukrainian regions” as “priorities”.

Intercontinental missile launchers parade on Red Square in Moscow on May 9, 2024 © AFP – Alexander NEMENOV

The sum allocated for Defense will thus represent in 2025 nearly 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 in charge in particular of repressing critics of the Kremlin, will increase to 3,460 billion rubles (33 billion euros), representing nearly 10% of the annual spending of the Russian State.

This Defense-Security combination will represent approximately 40% of the budget. Not to mention many classified investments.

– 1.5 million soldiers –

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In a sign that military spending is not about to decrease, Vladimir Putin signed a decree in mid-September ordering an increase of nearly 15% in the number of soldiers, bringing it to 1.5 million.

With this new increase, 1 in 50 active personnel in Russia will now be in the army, which, according to Russian media, would become the second largest in the world after China.

To “effectively” manage the army's accounts, where corruption remains endemic, Vladimir Putin has placed an economist, Andrei Beloussov, at the head of the Ministry of Defense since May. And many defense sector officials have been imprisoned.

In total, federal spending will increase to 41,500 billion rubles (about 400 billion euros) in 2025.

Ukraine: the positions of the military forces © AFP – Valentin RAKOVSKY, Sophie RAMIS, Cléa PECULIER

To balance its budget, the government has planned to increase taxes on high incomes and businesses on January 1, a way to continue financing the offensive in Ukraine and its related expenses.

However, labor shortages 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 the risk of “stagflation” in the long term.

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 (EUR 48.3 billion).

– Russian push in the East –

Since the large-scale Russian attack on Ukraine in February 2022, many Ukrainian cities have been targeted by deadly bombings regular.

On the night of 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, having claimed on Monday the conquest of a new small town, Nelipivka.

After a Russian missile strike in Zaporizhzhia, Ukraine, on September 29, 2024 © UKRAINIAN EMERGENCY SERVICE – Handout

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 redeploy enough troops there to relieve the front.

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