10.7 trillion rubles on the military in the first half of 2026. That is 44 percent of every ruble the Russian state spent. It also makes up 57 percent of every ruble it actually collected. Not a typo.
The Classified Line Is the Real Budget
In six months, the army consumed more than half of Russia’s entire federal revenue stream, while the budget itself runs deep in deficit. An arsenal in the making. A failing state liquidating itself to feed a war it cannot win.
Look at the chart. The visible defense line barely moves. The classified line explodes. That gray zone is where the real story lives: hidden appropriations, off-budget war costs, secret procurement, payments to the dead and the soon-to-be-dead.
Since 2022, the Kremlin has lied about the war’s cost, and that lie is now built into the budget. You cannot audit what is classified. You cannot plan around what is hidden. All you can do is watch the deficit widen and the civilian economy suffocate.
The Deficit and the Death of Civilian Spending
The RAG data makes it worse. Seven months into 2026, the federal deficit hit 6.45 trillion rubles. That is nearly double the annual plan. Oil and gas revenues fell 16.8 percent, even with the Strait of Hormuz tensions supporting prices.
The key rate sits at 14 percent, which protects the ruble while killing investment in everything except shell factories. Industrial growth over three years is 18.3 percent, and every bit of it is military. Civilian output shrank.
Debt service now eats 8.8 percent of the budget. That is more than education and healthcare combined. In Putin’s Russia, interest payments on war debt outrank schools and hospitals in the actual social contract.
The Russian state is cannibalizing its own future at an accelerating rate, even as it remains stable in the near term.
A War Economy with No Exit Ramp
And still Western analysts ask whether sanctions are working. They are working slowly, the way a tourniquet works slowly. Regions are raising property taxes and cutting contract bonuses. Recruiters are paid under the table because the legal budget has no line for purchasing men. Public confidence in the war is at its lowest point since the invasion.
The economy is a war economy with no exit ramp. The regime cannot survive peace.
Ukraine’s defense industrial expansion matters. Every Ukrainian drone that hits a refinery forces Russia to spend more on air defense, repairs, and shadow payments to keep the population quiet. Every month of war pushes the classified line higher and the civilian budget lower.
The West is actively helping Ukraine defend itself. It is forcing the Kremlin to choose between imperial delusion and domestic collapse. Russia has already chosen. The budget proves it.
