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Russia to cut welfare, education funding in 2027 as war spending soars
Reuters • • world
Key Points:
- Russia plans to cut funding for welfare, education, and healthcare in its 2027 state budget to accommodate a significant increase in military spending, with defense costs set to rise by 27% to 17.1 trillion roubles ($202.58 billion).
- Social policy funding, including pensions and benefits, will decrease by 7%, education funding by 6%, and healthcare funding by 6.8% compared to initial plans, while national economy spending will drop by 7.4%.
- The budget reflects ongoing fiscal strain due to the war in Ukraine, with Russia relying more on borrowing, tax hikes, and drawing from reserves, while repeatedly missing deficit targets.
- Debt-servicing costs are projected to increase by 21.6% in 2027, accounting for 9.4% of total spending and expected to rise to 10.6% by 2029, driven by high interest rates and increased borrowing.
- Despite public discontent over tax hikes and utility tariff increases, the pro-Kremlin State Duma is expected to approve the budget, prioritizing military expenditure over other social needs.
