Russia approves a budget with a record amount devoted to defense spending
Business
Russia approves a budget with a record amount devoted to defense spending
LONDON (AP) — The lower house of Russia’s parliament, the State Duma, approved a federal budget Friday that increases spending by around 25% in 2024 and devotes a record amount to defense.
The budget for 2024-2026 was developed specifically to fund the Russian military and to mitigate the impact of “17,500 sanctions” on Russia, State Duma Chairman Vyacheslav Volodin said.
Under the spending plan, the country’s largest ever, defense spending is expected to overtake social spending next year for the first time in modern Russian history. The development comes as the Kremlin is eager to shore up support for President Vladimir Putin before a March presidential election.
Record low unemployment, higher wages and targeted social spending should help the Kremlin ride out the domestic impact of pivoting the economy to a war footing but could pose a problem in the long term, analysts say.
The budget “is about getting the war sorted in Ukraine and about being ready for a military confrontation with the West in perpetuity,” Richard Connolly, an expert on Russia’s military and economy at the Royal United Services Institute in London, has said.
“This amounts to the wholesale remilitarization of Russian society,” he said.
The Russian Communist Party voted against the budget, criticizing what it described as “low pensions” and not enough financial support for elderly people, Russian state news agency Tass said. The budget will now go to the Federation Council — the upper chamber of Russia’s parliament — for approval and eventually to Putin for signing.
“In these difficult conditions, we have managed to adopt a budget that will not only allocate the necessary funds for our country’s defense, but which will also provide all the required funds to guarantee the state’s social obligations,” State Duma First Deputy Chairman Alexander Zhukov said, according to Tass.
Russia’s Finance Ministry said it expects spending to reach 36.66 trillion rubles (around $411 billion) in 2024, with a predicted budget deficit of 0.8% of Russia’s gross domestic product.
Part of the Russian budget is secret as the Kremlin tries to conceal its military plans and sidestep scrutiny of its war in Ukraine. Independent business journalists Farida Rustamova and Maksim Tovkaylo said on their Telegram channel, Faridaily, that around 39% of all federal spending will go to defense and law enforcement in 2024.
