Russia's 2025 Budget Increases Defense Spending by 25% Amid Economic Challenges

Russia's ambitious draft budget for 2025 to 2027 highlights a sharp rise in defense spending, projecting 25% more than the 2024 level. This accounts for more than 6% of Russia's GDP. The country has adapted its economy for war, focusing heavily on military production and circumventing sanctions since its invasion of Ukraine in 2022. Russia's inflation rate is over 9%, and the central bank recently raised its key interest rate to 19%. Analysts warn that Russia's unprecedented military spending could destabilize the economy, leading to higher living costs and public dissatisfaction as social spending declines.