Russian Finance Ministry and Central Bank warn Putin: military spending strangles budget

Senior officials from Russia's Finance Ministry and Central Bank have warned President Putin that the current level of defence spending poses a threat to the country's budget sustainability and will result in a dangerous growth in budget deficit. Military expenditure has grown to a level that Russia's budget cannot sustain.

Senior officials from Russia's Finance Ministry and Central Bank have issued a serious warning to Vladimir Putin: the country's current defence spending level threatens the sustainability of the state budget and is causing a dangerous increase in budget deficit.

Since the beginning of Russia's full-scale war in Ukraine in 2022, the country has drastically increased its military spending. The state now allocates a significant portion of its budget to defence, which puts pressure on other state priorities and creates macroeconomic imbalance.

The Central Bank has previously also warned of high inflation, which is partly fuelled by large state spending in the defence sector. The Finance Ministry, in turn, faces pressure to find additional revenue or cut spending elsewhere to cover expanding military costs — both options are politically and economically painful.

According to observers, this is a rare situation where the Kremlin's own financial institutions are raising their voices about budget sustainability. This points to growing strain within Russia's war economy, where short-term military needs are in conflict with long-term economic stability.