Russia spent half of its federal budget on its military last year, an analysis by Germany’s foreign intelligence agency found.
The Bundesnachrichtendienst (BND) found that Moscow’s actual defense spending was 66% higher than it had officially declared.
In 2025, Russia’s military spending accounted for 10% of its total economic output, though it made up half of the country’s total budget.
Russia’s total expenses directly related to the war in Ukraine reached approximately 11.1 trillion roubles ($137.9 billion), Meduza, an independent Russian news outlet, reported. The Economic Ministry estimated that Russia’s GDP for 2025 was 217.3 trillion roubles ($2.7 trillion).
Last fall, the Kremlin announced it would spend 13 trillion roubles (about $160 billion) on its defense. While Moscow claimed that it was the first time since the illegal occupation of Ukraine that its defense spending trended down, the BND estimated that the Kremlin is spending more than its allotted defense budget on a separate project directly related to the military.
Construction projects for the Defense Ministry, military IT programs, and benefits for members of the armed forces were all hidden elsewhere within the state budget.
Russia spends half of state budget on defense
Projects such as these are not just used for the war against Ukraine, but for developing Russia’s defensive capabilities along its border with NATO countries in Eastern Europe.
“These figures concretely illustrate the growing threat to Europe posed by Russia,” the BND report stated.
The German intelligence report noted that Russia’s interpretation of what constitutes defense spending is much narrower than NATO’s definition, but the Kremlin has been known to dramatically distort figures.
In the last five years, Russia has doubled its military spending and now has the third-largest defense budget in the world.
A publication from the Stockholm International Peace Research Institute found that the Kremlin planned to spend approximately 15.5 trillion roubles on its military in 2026, equivalent to 7.2% of its GDP.
At the start of the war in Ukraine in 2022, Russia’s defense spending accounted for nearly 6% of the country’s GDP.
In December, NATO Secretary-General Mark Rutte said that Russia could attack a NATO country in the next two to five years.
"Russia is already escalating its covert campaign against our societies," Rutte said at the time. "We must be prepared for the scale of war our grandparents or great-grandparents endured."
"We are Russia's next target. I fear that too many are quietly complacent. Too many don't feel the urgency. And too many believe that time is on our side. It is not. The time for action is now," he added.
"Conflict is at our door. Russia has brought war back to Europe. And we must be prepared.”
US wants Russia, Ukraine to end war by summer, Zelensky says
The United States wants Russia and Ukraine to find a solution on how to end the war, the largest since World War Two, before summer, President Volodymyr Zelensky said.
In remarks to reporters released by his office on Saturday, Zelensky said that the United States had proposed a new round of talks between Kyiv and Moscow to take place in Miami in a week, and that Kyiv had agreed.
Ukraine and Russia concluded two days of US-brokered peace talks in Abu Dhabi this week without a major breakthrough.
Reuters contributed to this report.