Moscow Pivots Budget Toward Defense as Social Spending Faces Cuts

The proposed fiscal roadmap outlines broad retreats across non-military sectors. Allocations for social policies, encompassing pensions and veterans' support, are slated for a 7% reduction. Education and healthcare face similar contraction, with budgets shrinking by 6% and 6.8% respectively, while infrastructure and agricultural investment will drop by 7.4%.

This aggressive reallocation comes as the fiscal strain of the war in Ukraine enters its fifth year. Having already exhausted significant reserves and implemented widespread tax hikes, the Kremlin faces a narrowing path to solvency. Debt servicing costs are now compounding the pressure, projected to consume 9.4% of total state spending by 2027. Despite attempts to implement a stable three-year planning cycle, the government has repeatedly failed to meet deficit targets, forcing constant upward adjustments to financial projections that have begun to irritate even firm supporters of the administration.