Russia’s Defense Expenditure
Russian defense expenditure increased from $43.9 billion in 2020 to $48.6 billion in 2021. In 2020, however the expenditure witnessed an annual decline, 2019 expenditure at $46.3 billion. Russian defense expenditure, in effect, increased from $45.1 billion in 2018 to $47.3 billion in 2022, reflecting a coumpound annual growth rate (CAGR) of 1.2% during 2018 and 2022. Russian acquisition expenditure, which is valued at $26.7 billion for 2022, is anticipated to register a CAGR of 3.4% increase from $27 billion in 2023 to $30.9 billion in 2027.
Russia’s Defense Acquisition Expenditure
Russian defense acquisition expenditure stands at $26.7 billion in 2022 and has registered a negative CAGR of 0.3% between 2018 and 2022. With irredeemable differences with the US-NATO alliance over its involvement in Ukraine, culminating in the invasion of Ukraine in February 2022, Russia now stands isolated, and its economy is subjected to a wide range of sanctions. The need to replace equipment losses due to attrition coupled with the modernization and replacement of obsolete equipment is anticipated to fuel defense acquisition funding over the forecast period. The Russian defense acquisition funding is anticipated to increase from $27 billion in 2023 to $30.9 billion in 2027, reflecting a CAGR of 3.4%.
In terms of local currency, the Russian defense expenditure was valued at RUB3510.4 billion in 2022, and registered a CAGR of 1.2% during 2018–22. However, the defense expenditure is forecast to grow at a higher CAGR of 3.5% to the value of RUB4370.7 billion in 2027.
Russia’s Budget Impact
The budget has helped Russia to continue acquisitions of major defense platforms to meet perceived international threats and possess advanced technologies. Investment continues in emerging technology like its hypersonic missile, Zircon, allowing it to be at the forefront of such innovation vis-a-vis China and the US. Other traditional acquisitions include the S-400, SU-30M, and the Yasen-class submarines.
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