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Putin Approves New Budget With Record Defense Spending.
President Vladimir Putin has approved a new, multi-year budget that sets defense spending for next year at record high levels, signaling no let up in the Russian determination to defeat Ukraine.
The approved budget, which was published on the government’s main web site December 1, calls for 35.5 percent of all spending to be allocated for national defense in 2025. That’s up from a reported 28.3 precent this year.
The spending plan had been approved by both houses of Russia’s parliament over the previous 10 days. At 13.5 trillion rubles ($145 billion), defense-related spending is at a level not seen since the Cold War.
While the budget showcases the government’s intention to pump money into the armed forces and security agencies, it also shields up to a third of expenditures from public scrutiny – a break from past budgets.
The government has presented the draft budget as “balanced”, with the deficit falling to 0.5 percent compared to this year’s projected deficit of 1.7 percent.
The flood of government spending has caused the economy to wobble in recent months. Officials have steadily ratcheted up already high wages and benefits for volunteer soldiers to fight in Ukraine, a sign that recruiting efforts are growing more difficult as the war stretches on more than 32 months.
But that has resulted in labor shortages in many industries, driving up wages and prices. Prices for basic staples like potatoes or butter have skyrocketed in recent month. The unemployment rate has dropped to 2.4 percent
The Central Bank, meanwhile, has hiked interest rates to levels not seen in years, in a bid to cool down the economy. But that in turn has dampened real estate transactions – as mortgages become unaffordable – and prompted business leaders to grouse about the potential for bankruptcies.
Russia’s all-out invasion of Ukraine, which started in Feb. 2022, has become Europe’s biggest land war since World War II.
(rferl)