Half of the defence budget? Russia hides billions

Official Russian data on the defense budget are often incomplete and fail to account for all military-related costs. According to the Stockholm International Peace Research Institute (SIPRI), which relies on open sources and estimates, Russia’s military spending has been steadily rising since the start of its full-scale invasion of Ukraine:

• In 2022, approximately $102 billion (4.5% of GDP);
• In 2023, approximately $109 billion (5.4% of GDP);
• In 2024, approximately $149 billion (7.1% of GDP);
• In 2025, estimates suggest around $187 billion (7.2% of GDP).

However, too much emphasis should not be placed on raw figures and data, as there are no fully verified sources confirming any of these calculations. In some cases, discrepancies between sources may exceed one percentage point. Nevertheless, these figures indicate a clear trend within the Russian Federation—defense spending is rising year by year. On one hand, Russia must cover the ongoing costs of its war against Ukraine; on the other, it continues to expand its military capabilities in the rear. How large, then, might the scale of these „hidden” expenditures be? This question has been taken up by German intelligence.

BND: Unofficial Spending Is Significantly Higher

The BND analysis, cited in the article by Der Spiegel, points to an even higher level of expenditure. According to the report, between 2022 and 2024, the share of military spending in GDP rose from 6% to 8.5% officially, but the actual figures may be up to 66% higher. The BND estimates that in 2025, the Russian Federation may have actually spent as much as $282 billion on its military, equivalent to 10% of GDP. This far exceeds SIPRI’s estimate of $187 billion. It would mean that the Russian Federation could be allocating up to 50% of its state budget to defense spending, as reported by the British The Telegraph.

How can Russia afford this? There are indications that some funds classified, for example, as spending on infrastructure or advanced technologies are in fact being funneled into the Russian war machine. The BND stated that these expenditures are being used not only to sustain the ongoing war in Ukraine but also to expand Russia’s sub-threshold operations against countries on NATO’s eastern flank.

Profits from Foreign Sales?

According to statements from the Kremlin, the Russian Federation earned over $15 billion from arms exports in 2025, supplying military equipment to more than 30 countries, mainly in Africa, Asia, and the Middle East. President Putin emphasized that these contracts were fulfilled despite Western sanctions, and that the proceeds would be used to modernize defense plants, expand production capacity, and finance research and development.

If these figures were accurate, it would represent a near return to pre-invasion levels of arms exports, providing a major source of revenue for Russia’s military-industrial complex—partially offsetting the effects of economic isolation and sustaining its „war economy.”

At the same time, such Kremlin data raise doubts. SIPRI’s statistics indicate that Russian exports of major weapons systems fell by nearly half between 2022 and 2024, and by more than 60% in the long term, pushing Russia down to third place among global arms exporters. Moreover, Moscow stopped publishing detailed contract data after February 2022, making it much harder to verify official statements, which also serve as tools of Russian propaganda.

In this context, the declared $15 billion figure appears to reflect a political narrative aimed at both Western audiences and Russian citizens rather than the actual state of Russia’s arms export sector—especially since the rising revenues of key corporations such as Rosoboronexport stem primarily from domestic demand driven by the war, not from a recovery of Russia’s position on the global market.

It should be noted, however, that the Kremlin has prioritized arms sales to Africa, Asia, and the Middle East, with further deliveries planned for 2026–2028.

What's Next?

Russia is increasingly operating under a war economy model, in which military expenditures far exceed official declarations. Findings by the Bundesnachrichtendienst suggest that the scale of military financing enables the Kremlin not only to sustain its war against Ukraine but also to systematically expand its military potential for the future—including capabilities for sub-threshold operations against NATO’s eastern flank.

Authors: Aleksander Olech, Wojciech Kozioł