Russia's Spending Surge: The Cost of Conflict in Ukraine

Russia is set to allocate 5.1% of its GDP to the Ukraine conflict in 2025, with the total defense budget comprising 7.3% of GDP. Minister Andrei Belousov highlights budget restrictions and cost optimization amid fiscal challenges and reforms aimed at improving military procurement and housing.

Russia is poised to dedicate a significant portion of its gross domestic product (GDP) to the ongoing conflict in Ukraine in 2025, Defense Minister Andrei Belousov announced, marking the first official projection of this expenditure.

The Economy Ministry's GDP estimate places war-related spending at around 11 trillion roubles, forming just part of the broader 7.3% GDP defense allocation for the year. Notably, 6.2% of GDP is earmarked specifically for national defense, with an additional 1.8% allocated to national security, pushing the combined total to 17 trillion roubles.

Appointed by President Vladimir Putin, Belousov--after successes marred by battlefield failures--stressed the necessity of stringent budget optimization and prioritization, revealing that the ministry is both tackling austerity measures and streamlining procurement to cut costs amid increasing fiscal challenges.

(With inputs from agencies.)