Prepares for a protracted war. Putin plans to increase Russian defense costs by 43% - Bloomberg
According to the three -year financial plan of the Russian Federation, which Bloomberg has read, the cost of defense will exceed the initial budgetary payments for the next year by more than 43%, and the corresponding categories of expenditures on national security and law enforcement will increase by more than 40%. Video day budget forecasts are changing as priorities are shifting in favor of the military.
Instead, funding for some areas, including environmental protection, is declining, the publication writes. The costs of "national defense" are almost 5 trillions of rubles ($ 84 billion), or 3. 3% of GDP, taking second place in the cost of the Russian budget. More expenditures in the Russian Federation are planned only for social programs.
According to the Stockholm International Institute for World Research (SIPRI), the National Defense Article in the Russian budget is about three -quarters of all military expenditures and includes financing operative expenses and the purchase of weapons. Instead, funding for education and culture in 2023 is hardly increasing, according to the document. Environmental protection costs will be approximately a quarter less than they have been planned, and will be 0. 2% of GDP.
These changes reflect the growing predisposition of the Russian Federation to continue the war, which has already cost it to Ukraine and Russia with a huge price of spilled blood and lost resources, Bloomberg writes. Serious failures on the battlefield forced Putin to activate his efforts to restore positive dynamics this week, when he announced "partial mobilization" for a conscription of up to 300,000 reservists, reminiscent of the publication.
The budget plan for the call in 2023 was spent in almost 16 billion rubles, and in 2024-2025 - 16. 5 billion rubles annually. Most other military expenditures remain classified, the publication notes. According to the SIPRI, which tracks the global weapons industry, Russia was one of the top five countries with the highest weapons costs last year. According to analytical centers, in 2021, the Kremlin increased military expenses by 2. 9% to $ 65.
9 billion, which was the third consecutive year of the cost increase after falling in 2016–2019. According to Bloomberg, the first round of mobilization will be a one-time blow in production, which will deepen the reduction of the Russian economy this year to -3. 75%. The main reason is the outflow of labor, since mobilization will probably cause a wave of its leakage beyond the Russian Federation into safe places in neighboring countries. This is a repetition of the events of February 2022.
Redirection of resources and labor into the army will exhaust the Russian economy, which is in recession, in addition, the labor market of the Russian Federation and is already suffering from bad demographic indicators. In addition, problems are waiting for the Russian budget because of the aggravation of the confrontation with Russia's supply of energy to Europe.
According to the budget plan, in 2023-2025, annual exports of pipeline gas will be reduced by almost 40%, with the supply of crude oil a little. The government's balance was well withstood the crisis, partly due to the profit derived from the increase in the value of raw materials. However, reducing funds from the State Welfare Fund means that in two years it will decrease by more than 3 trillions of rubles. The government will have to compensate for the increase in expenses by raising taxes.
Among other changes, the budget will also allocate more money for "patriotic education" - a program that includes historical exhibitions, and provides an increase in the cost of equipping schools with state symbols. The publication reminds that the Government of the Russian Federation has approved the budget of the plan last Thursday, and now the bill must receive the support of both houses of the Parliament (State Duma of the Russian Federation) and be signed by the President.
Changes may still be made, but most of the points are unlikely to undergo serious changes. According to recent forecasts, the Russian budget deficit will increase to 2% of GDP next year from 0. 9% in 2022. The government will mostly fund debt and reserves. The plan also provides borrowing up to $ 1 billion annually in foreign currency.