Russia to increase defense budget, counteract Western funds to Kiev

By Al Mayadeen English
Source: Bloomberg
22 Sep 2023 18:22

Amid Western complicity in the Ukraine conflict, Moscow's defense spending plans are expected to surge, according to a document obtained by Bloomberg.

A view of the factory for the production of military armored vehicles in the Republic of Tatarstan, Russia, on July 11, 2023 (AP)

As the West engages in prolonging the war in Ukraine by providing additional funds and weapons to Kiev and imposing further sanction packages on critical economic sectors in Russia, Moscow continues to focus on reshaping its economy. It plans for a significant increase in defense spending in 2024 to counteract the Western funds flowing into Ukraine.

According to draft budget plans obtained by Bloomberg News, Russia intends to allocate 6% of its gross domestic product (GDP) to defense spending next year.

This marks a substantial increase from the 3.9% allocated in 2023 and the 2.7% spent in 2021. Additionally, expenditures on classified or unspecified items are expected to almost double.

Under the proposed draft, defense spending would increase to 10.8 trillion rubles ($112 billion) in 2024, up from 6.4 trillion rubles in the current year.

Classified expenditures are expected to rise to 11.1 trillion rubles, nearly doubling from the 6.5 trillion allocated for 2023. This would constitute 30% of the total budget, doubling the undisclosed portion from its all-time low of 14.9% in 2021.

Meanwhile, social policy spending is projected to reach 7.5 trillion rubles in 2024, up from 6.5 trillion in 2023. The draft budget anticipates total expenditures of 36.6 trillion rubles in 2024, a 15% increase from the current year.

Russia remains optimistic

Despite the impact of sanctions, the Russian government maintains an optimistic outlook. It expects revenue to exceed 35 trillion rubles, marking a 22% increase from 2023, and envisions reducing the deficit from 1.8% of GDP in 2023 to 0.9% in 2024, with further reductions to 0.4% in 2025.

Additionally, oil and gas revenues are projected to grow by nearly 25% in 2024 to reach 11.5 trillion rubles.

It is important to note that if the document obtained by Bloomberg is authentic, for this fiscal draft to become law, it must receive approval from both houses of parliament and be signed by the president.

According to Oxfam's analysis of data from the Joint Coordination Centre, the Black Sea Grain Initiative primarily shipped approximately 80% of its grain and other food products to wealthier countries, while only a small portion was sent to the world's poorest nations. pic.twitter.com/HfKlYdok4C
— Al Mayadeen English (@MayadeenEnglish) July 22, 2023