Russia to cut welfare, education funding in 2027 as war spending soars - Reuters

Russia’s 2027 state budget will include cuts to welfare, education and health‑care spending, alongside previously announced tax increases, as the government seeks to finance a sharp rise in defence outlays. The budget documents show that defence spending is projected at 17.1 trillion roubles (about S$259 billion), roughly 27 percent higher than the 13.5 trillion roubles originally earmarked and the largest level since the war in Ukraine began in 2022.

Funding for the social‑policy pillar, which covers state pensions, payments to war veterans and maternity benefits, is set to fall by 7 percent in 2027. The education budget will be reduced by 6 percent, while health‑care allocations are slated to decline by 6.8 percent compared with the initial plan.

The “national economy” segment of the budget, encompassing road construction, other infrastructure projects and subsidies for agriculture and related sectors, will also be trimmed, with a projected reduction of 7.4 percent for 2027.

Russia’s fiscal position has steadily weakened over the four‑and‑a‑half years of the conflict, prompting the government to draw on its fiscal reserve fund, increase borrowing and raise taxes to meet the growing demands of the military budget. The state has repeatedly missed its annual deficit targets and has had to revise revenue and expenditure forecasts upward each year.

In response to the mounting pressures, officials are preparing a three‑year budget framework intended to improve long‑term planning. However, the current federal budget does not incorporate the finances of regional and municipal authorities, leaving those levels of government to manage their own adjustments amid the broader fiscal tightening.