# ANALYSIS: +5 Trillion Rubles — The Bet of a Spent Russian Economy

> On June 18, 2026, Bloomberg News published a report that traveled through trading floors and chancelleries like a shockwave: Russia plans to increase its military spending by an additional 4 to 5 trillion rubles in 2026 — roughly 40 percent more than what had been budgeted. To fund this surge, Moscow intends to borrow between 2 and 3 trillion additional rubles on the domestic m

- Author: Maxime Marquette
- Publisher: MadMax (https://mad-max.co)
- Section: Analysis
- Published: 2026-06-28
- Canonical URL: https://mad-max.co/en/article/analyse-5-trillions-de-roubles-le-pari-d-une-economie-russe-a-bout

## Introduction: the Bloomberg revelation that changes everything

### June 18, 2026: a financial bomb from London

On **June 18, 2026**, **Bloomberg News** published a report that traveled through trading floors and chancelleries like a shockwave: **Russia** plans to increase its military spending by an additional **4 to 5 trillion rubles** in 2026 — roughly **40 percent more** than what had been budgeted. To fund this surge, **Moscow** intends to borrow between **2 and 3 trillion additional rubles** on the **domestic market**, the agency reported, citing anonymous sources.

The figure is staggering in its bluntness. The **initial 2026 budget** had already allocated **16.84 trillion rubles** to defense and security — nearly **40 percent of the total federal budget** of **44.1 trillion rubles**. With the addition of **4 to 5 trillion**, security spending could represent **41 to 45 percent** of the total budget, and the defense-only budget could approach **18 trillion rubles** (**$244.8 billion**). This is **militarization without precedent in Russia's modern history**, including compared to the **Cold War** years.

### A deficit exploding even before the announcements

These projections for additional spending arrive as **Russia's budget deficit** is already out of control. According to data from the **Russian Finance Ministry** compiled by **Bloomberg**, the deficit for the first five months of 2026 reached **6 trillion rubles** (**2.6 percent of GDP**), exceeding by **60 percent** the initial annual target of **3.8 trillion**. This deficit even surpasses the **full-year 2025 deficit** (**5.6 trillion**) — and we are only halfway through the year.

To compensate, **Moscow** is drawing on domestic borrowing at high interest rates — the yield on Russian government bonds is running around **15 percent**. Debt servicing has become the **fifth-largest line item in the federal budget**, absorbing nearly **9 percent** of total spending — roughly **4 trillion rubles per year**. And that is **before** the additional borrowing planned to finance the war.

*When I read these numbers, I think about what 5 trillion rubles means in human terms. It is the equivalent of 30 years of health spending for several large Russian regions. It is the monthly invoice for the war — 2.7 billion rubles per hour, according to economist Janis Kluge. And Putin wants even more. I do not know whether that is madness or calculation. Perhaps both.*

## Janis Kluge's figures: a record first quarter

### 5.9 trillion rubles in three months

Economist **Janis Kluge**, researcher at the **German Institute for International and Security Affairs (SWP)**, published on **June 12, 2026** an analysis that has become the reference in expert circles. His calculations, based on data published by the **Russian Finance Ministry**, show that **Russian military spending** reached **5.9 trillion rubles** (approximately **$83.2 billion**) in the first quarter of 2026 — up **30 percent** from the first quarter of 2025 (**4.5 trillion**).

That figure represented **46 percent of all federal budget spending** — meaning practically **one ruble in two** spent by the **Kremlin** went to the war effort. For the first time since the start of the full-scale conflict, the military share crossed the symbolic threshold of **46 percent** of the total budget. In terms of rate: **2.7 billion rubles per hour**, **65 billion per day**, **2 trillion per month**. These figures are staggering — and they are accelerating.

### The budget paradox: Moscow wanted to cut, it is spending more

The historical irony is striking: the **2026 budget law** had projected a **reduction in military spending** from **7.8 to 6.2 percent of GDP** — a nominal reduction that perhaps reflected hope for a diplomatic solution. Result: in just **three months**, military spending reached **12 percent of quarterly GDP**, or **double** the annual target. If this pace holds — a hypothesis **Kluge** himself considers probable — Russian military spending could reach **9 to 10 percent of GDP** for the full year. Unprecedented since the **USSR**.

How to explain this gaping chasm between forecast and reality? Economists advance two hypotheses. First hypothesis: **massive advance payments** on armaments contracts in the first quarter. Second hypothesis, more alarming: **Russia** has simply decided to accelerate its military spending because the situation at the front demands it — and the budgetary consequences have become secondary.

*Kluge's analysis struck me through its rigor and restraint. He does not try to dramatize — he lays out the numbers. And the numbers are dramatic in themselves. 2.7 billion rubles per hour. I repeat: per hour. That is the equivalent of the annual budget of a mid-sized Russian city, spent in 60 minutes on a war that nobody in Russia seems able to stop.*

## The Duma passes an emergency law: the guardrails come off

### June 10, 2026: the Duma erases budget limits

Revealing of the budgetary panic in **Moscow**: on **June 10, 2026**, the **State Duma** (the Russian parliament) approved a law allowing the government to **increase spending and debt without the usual lengthy procedures for amending the budget law**. Concretely, **Moscow** can now modify its borrowing and debt ceilings without parliamentary debate, without publicity, and without the delays that previously took months.

This law is an explicit admission that the Russian government can no longer manage its finances within the normal framework. By erasing the legal guardrails that had governed military spending, the **Duma** handed the **Kremlin** a blank check to spend as much as it wants — whenever it wants — on the war. **Anton Siluanov**, Finance Minister, made clear that **changes to debt and spending plans will no longer be publicly disclosed**. Russia's financial transparency, already limited, is now officially buried.

### Internal financial alarm signals

Even before this law, alarm signals had emerged from within the Russian system itself. According to **Bloomberg** of **June 1**, officials from the **Finance Ministry** and the **Russian Central Bank** warned **Putin** that current military spending is on an **"unsustainable"** trajectory and risks dangerously widening the deficit. This is the most serious sign of internal division within the **Kremlin** since the full-scale invasion began. **Central Bank Governor Elvira Nabiullina** mentioned **"pro-inflationary risks"** tied to foreseeable budget overruns over the next three years.

**Putin**, according to sources cited by **Bloomberg**, refused to cut military spending. He instead asked the **Finance Ministry** to identify cuts in **civilian sectors**. The hierarchy of priorities is absolutely clear: **the war above everything else**. Healthcare, education, social welfare — everything can be compressed. Not the war machine.

*When a country's Finance Minister and Central Bank Governor warn their head of state that spending is "unsustainable," that is an exceptional event. In a democracy, it would trigger a political crisis. In Russia, it is a politely ignored warning. But the warning was given. And it will be documented for history.*

## Domestic borrowing: a dangerous spiral

### Borrowing at 15%: the debt trap

To finance the budget overrun, **Russia** is borrowing heavily on its **domestic market**. Russian government bonds (OFZ) trade at **yields of approximately 15 percent** — an extraordinarily high rate that reflects the risks perceived by domestic investors. These high rates are themselves a consequence of **Central Bank** policy, which maintains elevated benchmark rates to contain galloping inflation fueled by war spending.

The problem with this spiral: every ruble borrowed today costs **15 kopecks in interest per year**. On **2 to 3 trillion rubles** of additional borrowing, that represents **300 to 450 billion rubles in additional annual interest** to be paid in coming years. A debt burden added to an already colossal bill. At the current pace, according to **Le Grand Continent** of **June 20, 2026**, **Russia** could devote **15 percent of its GDP** to debt servicing over the next ten years — equivalent to its entire public debt outstanding.

### The sovereign wealth fund: reserves melting away

The Russian **National Wealth Fund (NWF)** — the savings accumulated during the oil boom years — is draining before our eyes. According to the **Institute for Strategic Sciences**, its **liquid assets** fell from **9.7 trillion rubles** in March 2022 to approximately **3.9 trillion** in April 2026 — a two-thirds reduction in four years. At this pace, liquid reserves could be practically exhausted within the **next 12 to 18 months**, without a significant recovery in oil prices or a drastic reduction in spending — two unlikely scenarios.

Without a sovereign wealth fund, **Russia** will be entirely dependent on current revenues and borrowing to finance the war. Its **oil revenues** are compressed by sanctions and the price cap effect. Its borrowing is expensive. And its tax receipts are under pressure. The financial picture is bleak — even as the Russian government does everything to obscure it.

*The Russian sovereign wealth fund — that war chest accumulated during the easy-oil years — was Putin's great insurance against economic shocks. Watching it shrink by 75 percent in four years is first-order strategic intelligence. Without that safety cushion, Russia will be far more vulnerable to the next shock — whether it comes from oil prices, sanctions or the front.*

## The impact on the Russian population: the army eats first

### VAT up, services down

To partially offset the rise in military spending, the Russian government has **raised VAT** — bringing it to **22 percent** this year. Healthcare, education and civilian infrastructure see their budgets compressed. Aid to small businesses has been cut. The rule is simple: **everything not directly tied to the war can be cut**. And **Putin** has asked government agencies to reduce their non-essential spending by **10 percent**.

The **State Duma** warned at the end of June 2026 of the risk of an impending **"social explosion"** — a rare signal from a parliament that is normally servile. Duma members close to the real economy see rising prices, disappearing services, falling purchasing power. **Inflation** remains elevated. The cost of living is increasing. And Russian families are bearing the full brunt of the consequences of a war the **Kremlin** presents to them as an inevitable victory.

### 53 trillion rubles since 2022: a generation mortgaged

Since the start of the full-scale invasion in **February 2022**, **Russia** has spent a total of approximately **53 trillion rubles** (**$746.6 billion**) on the war in **Ukraine**, according to **Janis Kluge**'s calculations. To put the scale in perspective: this amount covers **28 years of budget spending on healthcare**, **30 years of education spending** and **100 annual budgets of major Russian regions**. It is an entire generation mortgaged to a war whose strategic benefits remain deeply contested.

This spending carries deep social consequences that will only fully materialize in the years ahead. **Human capital investments** — education, health, research — that determine long-term economic growth are being sacrificed on the altar of short-term military spending. **Putin's Russia** is consuming its future in an attempt to conquer a past that no longer exists.

*53 trillion rubles. 30 years of education. 28 years of healthcare. These numbers are abstract until you translate them into human terms: hospitals not built, schools not equipped, researchers not trained. Russia is paying the real cost of this war not in the trenches of the Donbas, but in its underfunded clinics and its universities watching their best minds leave.*

## The economic outlook: deterioration without collapse?

### Neither collapse nor recovery: structural purgatory

The most serious economists, including those at the **Foreign Affairs Forum** or the **ISW**, agree on one point: the Russian economy is **not on the verge of collapse**, but it is **deteriorating structurally**. **Putin** can still fund his war. But the hidden costs — growing debt, persistent inflation, brain drain, underinvestment in civilian life — are accumulating in ways that will not be easily reversed.

**GDP** contracted by **0.2 percent** in the first quarter of 2026 — its first contraction in three years. The civilian **construction** sector is stagnating. Household consumption is softening. And **medium-term prospects** are grim: by maintaining military spending at **9–10 percent of GDP**, **Russia** is inflicting on itself the same economic wounds as the **USSR** in the 1980s — the kind that do not kill immediately but undermine the foundations of any future growth.

### Bloomberg was right, but not soon enough

It is worth recalling that the **Bloomberg** revelation of **June 1, 2026** — financiers warning **Putin** of spending unsustainability — came as no surprise to economists who had been tracking the situation since 2022. What changed was the **brutality of the first-quarter figures** and the announcement of **4 to 5 additional trillion** planned. **Bloomberg** crystallized what many knew: **Russia** is betting its economic future on a military victory that looks increasingly out of reach.

That bet may be rational from **Putin**'s perspective: to stop now is to admit failure and risk losing power. To continue is to go all in on the military card — but stay in power while the dice fall. That is the **logic of a dictator** who has fused his personal fate with his country's fate. And it is precisely that logic that makes the situation so dangerous.

*Putin's bet looks increasingly desperate to me. He is borrowing at 15 percent to fund a war that his own finance ministers call unsustainable, hoping Ukraine will collapse before he does. It is an existential wager — and dictators who make that kind of wager generally know only one outcome.*

## Russia's sovereign wealth fund running dry: reserves evaporating

### From financial cushion to structural exhaustion

The **Russian National Wealth Fund (NWF)** — designed as a safety cushion for crisis periods — has been systematically emptied since **2022** to fund the war. From **9.7 trillion rubles** in March 2022, its liquid assets fell to approximately **3.9 trillion rubles** in April 2026 — a reduction of more than **60 percent** in four years. More significantly: **Russia** sold its physical gold reserves in **November 2025**, a desperate act that reveals the scale of its immediate financial needs.

This squandering of the sovereign wealth fund is irreversible in the short and medium term. Even if the war stopped, it would take years of budget surpluses to rebuild those reserves — and a post-war Russian economy would face massive reconstruction and industrial conversion needs. **Putin** has consumed the reserves his predecessors accumulated, mortgaging the country's financial stability for a generation. It is a political choice he made alone, without consultation or democratic mandate.

### Domestic public debt: a worrying spiral

To compensate for the depletion of reserves, **Russia** is borrowing heavily on its domestic market. **OFZs** — Russian government bonds — are being issued at rates approaching **15 to 16 percent**, reflecting the inflation and risk perceived by Russian investors themselves. These interest payments will absorb approximately **9 percent of federal spending** in 2026, a sharply rising share. The more the state borrows at high rates, the more resources it must devote to debt servicing — a classic vicious cycle.

**Russian banks**, the primary holders of these government bonds, see their balance sheets loaded with assets of uncertain real value. If the government were to default on its obligations, the entire banking sector would suffer. **Alexandra Prokopenko**, a former **Russian Central Bank** official, was blunt: "Practically all non-military or social spending is on hold." **Russia** is operating on the credit of its own future.

*What strikes me about Russia's financial management is the total absence of an exit strategy. **Putin** is spending the reserves, borrowing massively, raising taxes — but never explaining how he will repay this debt or replenish these reserves. It is a fait-accompli policy: commit the resources and sort it out later. That "later" belongs to future generations, not to the current regime. It is short-term politics financed by the long-term future of ordinary Russians.*

## Civilian sectors sacrificed: healthcare, education and infrastructure

### Social budgets compressed to feed the war machine

As military spending explodes, **Russian civilian budgets** are being systematically compressed. **Healthcare** — already underfunded before the war — sees its allocations reduced in real terms. **Regional hospitals** are short of medications, equipment and medical staff, partly because doctors have left regions for military salaries or for exile. The **life expectancy** of Russian men, which had progressed in the 2000s, is declining again according to independent demographic data.

**Education** is in a similar situation. Russian universities are losing their best professors and researchers — gone abroad for political or economic reasons. **Curricula** have been ideologized, incorporating war propaganda into school programs. Over the long term, it is the cognitive and scientific capacity of the nation that is being damaged. A generation of students educated in a context of censorship and heightened nationalism will be less competitive in the global knowledge economy.

### Civilian infrastructure in decay

**Roads**, **bridges**, **drinking water networks**, **district heating systems** — Russia's civilian infrastructure is suffering from chronic underinvestment worsened by the war. Regions distant from **Moscow**, already underfunded, see their budget allocations cut even further. Telling incidents are multiplying: burst pipes, collapsing aging buildings, heating failures in the depths of winter. These are symbols of the decay of a state that chooses missiles over plumbing.

Public **investment** in civilian transportation and telecommunications is frozen. Infrastructure projects announced with fanfare before the war have been quietly abandoned or postponed indefinitely. **Russia** increasingly resembles a country that devotes all its resources to war while letting the foundations decay on which a peacetime economy could eventually be rebuilt. It is an intergenerational sacrifice imposed by a single man.

*There is a cruel paradox in this Russia of 2026: a country that claims to defend its civilizational greatness while letting its hospitals, schools and roads crumble. **Putin**'s great **Russia** is a military power burning its own society as fuel. I do not know what historians will call this period — but I know they will not call it an era of greatness.*

## Conclusion: an economy sacrificed on the altar of an unwinnable war

### The verdict of the numbers

The figures of June 2026 paint a brutal portrait of the Russian economy. Deficit at **2.6 percent of GDP** in five months. Military spending at **46 percent of the budget**. Sovereign wealth fund reduced by **two thirds**. **5 additional trillion** to be spent. Borrowing at **15 percent** interest. These numbers do not describe a wartime economy that is suffering but holding — they describe an economy **systematically devoured by its own war machine**.

### Pressure to maintain without letup

For **Ukraine** and its allies, the lesson is clear: **maintain the pressure**. Sanctions that create component shortages, military support that forces **Russia** to spend even more, and international exposure of Russian financial concealment efforts — all of these contribute to accelerating the **structural deterioration** of an economy that the war is consuming from within. Let us not let up now.

*I end this analysis with a thought for ordinary Russians who are paying this bill: through heavier VAT, less well-equipped hospitals, pensions gnawed by inflation. They are not all responsible for this war. But they are paying the price. And when Putin is gone — for everything passes — it will be they who must rebuild what the madness of this war will have destroyed.*

**By Maxime Marquette, columnist**

## Columnist's transparency note

### Editorial stance

I am not a journalist but a **columnist and analyst**. My expertise lies in observing and analysing the geopolitical, economic and strategic dynamics that shape our world. My work is to take political strategies apart, to understand global economic movements, to put the decisions of international actors in context and to offer analytical perspectives on the changes that are redefining our societies.

I do not claim the cold objectivity of traditional journalism, which stops at reporting facts. **I claim analytical clarity**, rigorous interpretation and a deep understanding of the complex issues that concern us all. My role is to give meaning to the facts, to place them in their historical and strategic context, and to offer a critical reading of events.

### Method and sources

This text keeps the basic distinction between **verified facts and interpretive analysis**. The rule never changes: a factual claim is published only when a verifiable source supports it, and the sources this article actually used are listed under **Sources**, never here.

**Primary source families** used by the publication, when the story has them: official statements from governments and international institutions, public statements by political leaders, reports from intergovernmental organisations, dispatches from recognised international news agencies.

**Secondary source families**: specialised publications, internationally recognised news media, analyses from established research institutions, reports from industry organisations.

When an article cites statistical, economic or geopolitical data, it comes from the institutions that produce it (intergovernmental organisations, central banks, national statistics offices), and the exact institution is named under **Sources**.

### Nature of the analysis

The analyses, interpretations and perspectives in the analytical sections of this article are a **critical, contextual synthesis** based on the information available, the trends observed and the expert comments cited in the sources consulted.

My role is to interpret these facts, to set them in the context of today's geopolitical and economic dynamics, and to give them a coherent meaning within the larger story of the changes shaping our time. These analyses reflect expertise built through continuous observation of international affairs and an understanding of the strategic mechanisms that drive global actors.

This article describes a documented state of affairs on its publication date, not a prediction: later developments may shift its outlook. No update is promised in advance; when an article is corrected or completed, the change is dated in the text.

## Sources

### Primary sources

- [Meduza / Bloomberg — Russia to increase war spending by 4–5 trillion rubles — June 18, 2026](https://meduza.io/en/news/2026/06/18/bloomberg-russia-to-increase-war-spending-by-an-additional-4-5-trillion-rubles-in-2026)

- [Russianomics (Janis Kluge) — Russian military spending surges 30% in early 2026 — June 12, 2026](https://janiskluge.substack.com/p/russian-military-spending-surges)

- [Bloomberg — Russia Finance Officials Tell Putin War Spending Is Unaffordable — June 1, 2026](https://www.bloomberg.com/news/articles/2026-06-01/russia-finance-officials-tell-putin-war-spending-is-unaffordable)

### Secondary sources

- [Euromaidan Press — Russia poured 46% of budget into the military — June 14, 2026](https://euromaidanpress.com/2026/06/14/russia-poured-46-of-its-budget-into-the-military-in-early-2026-even-as-revenue-fell-isw/)

- [Le Grand Continent — Russian economy and debt servicing — June 20, 2026](https://legrandcontinent.eu/fr/2026/06/20/economie-russe-au-cours-de-la-prochaine-decennie-moscou-va-consacrer-15-de-son-pib-au-paiement-des-interets-de-sa-dette/)

- [Ukrainska Pravda — Russia may raise military spending by 40% — June 18, 2026](https://www.pravda.com.ua/eng/news/2026/06/18/8039951/)

- [RBC Ukraine — State Duma warns Putin of looming social explosion — June 13, 2026](https://newsukraine.rbc.ua/news/state-duma-warns-putin-of-looming-social-1781383858.html)

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Source: Maxime Marquette, MadMax. When citing, name the author and link https://mad-max.co/en/article/analyse-5-trillions-de-roubles-le-pari-d-une-economie-russe-a-bout