Secrecy surrounds an increasingly large chunk of Russia’s federal budget as President Vladimir Putin earmarks high amounts of money on his military amid his full-scale invasion of Ukraine.
Almost one third of Russia’s total expenditures is classified and the word “secret” appears 39 times in the budget when it was adopted last December, the Russian news outlet RuNews24.ru reported.
Janis Kluge, a Berlin-based expert on Russia’s state budget, told Newsweek on Thursday the increase in Moscow’s secret spending means that the cost of the war is rising. Newsweek has contacted Russia’s Finance Ministry for comment.
An illustration photo taken on September 11, 2024, shows Russian ruble banknotes
An illustration photo taken on September 11, 2024, shows Russian ruble banknotes
ALEXANDER NEMENOV
Why It Matters
Russia has managed to weather much of the economic turbulence caused by Western-led sanctions but there are questions over the sustainability of Putin’s spending plans for the war and the cost of increasing his military’s capabilities.
What To Know
Classified spending is the difference between total spending published by Russia’s Finance Ministry and open spending.
Yakov Yakubovich, an expert from Moscow’s National Research Nuclear University told RuNews24.ru that difference between these figures was 12.12 trillion rubles ($152 billion) or 29.22 percent of the budget. This is up from 11.1 trillion rubles ($121.19 billion) from the previous year, according to Bloomberg.
Yakubovich told RuNews24.ru that a significant part of hidden expenses concern national defense and security. In the context of the “special military operation”—Moscow’s term for the invasion of Ukraine—these funds are likely to used to finance the war effort and create infrastructure in new territories.
Publishing information about this spending could lead to new sanctions against Russian companies, which was the reason for the secrecy, Yakubovich added.
Kluge, from the German Institute for International and Security Affairs, told Newsweek on Thursday that almost all of Russia’s military spending is secret and most of Moscow’s secret spending is for the military.
He said this increase in secret spending means that the cost of war is rising as recruiting new soldiers, weapons and ammunition becomes more expensive every year.
The Russian government has also classified detailed demographic data as the country faces a plunging birth rate and population decline, which have been exacerbated by the war, due to losses and an exodus of those avoiding the draft.
Alexey Raksha, who had worked with Russia’s Federal State Statistics Service (Rosstat), said the agency recently stopped publishing figures for births and deaths for the most recent reporting period. It comes amid projections Russia’s population could almost halve to 83 million by the turn of the next century,
What People Are Saying
Yakov Yakubovich, from Moscow’s National Research Nuclear University: “The Russian federal budget for 2025…contains a significant share of secret expenditures. These costs are hidden from the public and raise many questions and assumptions.”
Janis Kluge, German Institute for International and Security Affairs: “Almost all of Russia’s military spending is secret. And most of Russia’s secret spending is for the military. The increase in secret spending means that the cost of war is rising…financing the war is becoming more difficult.”
What Happens Next
Kluge said that since 2022, Russia has been able to afford the increased military costs thanks to high energy prices. However, he said this year is different and the government could be forced to make budget cuts, borrow more or raise taxes again.