“Nabiullina’s Accounting Acrobatics”
- 13.06.2026, 16:13
A German economist explained why Russia's war spending has risen abnormally.
In the first quarter of 2026, the Russian Federation’s military military spending of the Russian Federation reached an unprecedented 5.9 trillion rubles, which is 30% higher than the figure for the same period last year, when it stood at 4.5 trillion.
This was reported by German economist Janis Klug in his analysis published on Friday, May 12, writes New Voice.
Military spending accounted for 46% of all federal budget expenditures—that is, nearly every second ruble spent by the Kremlin.
The main driver of this surge was the classification of expenditure items, which increased by 43% compared to the beginning of last year. Such rapid growth calls into question Moscow’s original financial plan, under which military spending was scheduled to be reduced to 6.2% of GDP in 2026, down from 7.8% in 2025.
At the same time, in just the first three months of this year, military spending has already consumed two-thirds of all tax revenues in the Russian Federation, which have declined significantly due to the tightening of oil sanctions and the general cooling of the Russian economy.
Kluge identifies two likely reasons for this abnormal surge in spending at the start of the year. The first is “accounting acrobatics” by the Russian Ministry of Finance, which may have deliberately shifted part of the military payments from the end of 2025 to the beginning of 2026 in order to artificially keep last year’s budget deficit within planned limits. Unusually low levels of classified spending in December of last year support this theory.
The second explanation could be excessive advance payments on arms procurement contracts in the first quarter. Analysts will be able to determine whether these data indicate a real acceleration in the pace of war financing to 9–10% of GDP or a routine shift in payment schedules after the publication of detailed budget statistics for the second quarter, which is expected in late summer.
It should be noted that a study by the Kiel Institute for the World Economy and the Stockholm Institute for Transition Economics states that the liquid assets of the Russian Federation’s National Wealth Fund have shrunk by three and a half times over the years of the war against Ukraine, while revenues from the oil and gas sector have nearly halved.
On June 1, 2026, Bloomberg reported, citing sources, that officials from the Ministry of Finance and the Central Bank of Russia warned the Kremlin that the current level of projected spending on the war against Ukraine threatens a dangerous increase in the state budget deficit.