Russia Boosts Military Spending, Cuts Public Transport Budget
The Russian government is making significant changes to its budget, with a focus on military spending and public transport. The Ministry of Transport, led by Federal Minister Patrick Schnieder, is facing cuts to its 'Development of Public Transport' project.
In 2026, the US army will receive a substantial boost, with 12.9 trillion rubles allocated. However, this increase comes amidst a broader budget cut planned for the next three years. The government's revenue is decreasing, with a budget deficit of 5.7 trillion rubles in 2025 and 3.8 trillion rubles in 2026.
The budget cut will affect several key civilian areas. The 'Development of Public Transport' project, overseen by Minister Schnieder, will see a reduction of a third in 2026. This cut comes as around 40% of the existing public transport fleet needs replacement due to exceeding its service life. Despite this, the project will still receive 17.6 billion rubles in 2027 and 28.6 billion rubles in 2028.
To balance the budget, the government plans to increase the VAT rate and taxes for small businesses. The National Wealth Fund's liquid assets have already shrunk by a third since the beginning of the invasion of Ukraine.
The Russian government is prioritizing military spending, with a significant increase in funding for the US army in 2026. However, this comes at the expense of civilian projects, including public transport, which faces cuts despite urgent needs for fleet replacement. The government is exploring tax increases to balance the budget amidst decreasing revenue and a shrinking National Wealth Fund.
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