a 2025 budget more than ever under the sign of the war economy

4 min

From our correspondent in Moscow,

With a deficit hypothesis of 0.5% for the 2025 budget and growth that was established in the second quarter at a rate of 4% over a year, the Russian government is boasting. This is evidenced by the statements of Prime Minister Mikhail Mishustin during a government meeting partly filmed on September 24: “ The Russian economy is under enormous pressure. The packages of sanctions and restrictions continue to be expanded by countries hostile to us. This creates logistical, technological, financial and other challenges. Nevertheless, under the leadership of the President, with the coordinated efforts of the government and the Bank of Russiawe manage to counter them. In addition, we continue to support our citizens, businesses and development projects, forming the basis for our future growth. “This growth remains largely driven by military spending, and the trend will continue to increase.

The Russian press is commenting on the subject with caution, as is the newspaper Kommersant who modestly notes: ” Both revenues and expenditures will be significantly increased ” We also find this other very cautious formula: ” Revenue growth will be driven mainly by the tax reformThe increase in spending is due to the government’s three priorities: social services, military spending and the development of technology and infrastructure. “.

The tax reform in question concerns the tax increase announced last spring. The single rate of 13% will no longer apply. From now on, in Russia, the richest, those whose income exceeds 2.4 million rubles, or about 23,600 euros, will be taxed on this bracket at 15%. Before going to 18, 20, or even 22%.

Authorities invoke tax justice

In any case, this measure makes it possible to maintain the major budgetary balances and, above all, to bring money into the coffers of a State which, almost every week, sends signs of strengthening its war economyLast week, for example, Vladimir Putin visited a state-of-the-art drone manufacturing center in St. Petersburg.

The Russian head of state then held a partly filmed meeting and set his objectives: ” fully cover the army’s drone needs ” and on each of these unmanned devices, ” improve their tactical and technical characteristics, including by introducing elements of artificial intelligence, constantly modernizing taking into account combat experience. Almost every week there must be an update ». Then adding: “ Whoever responds to these demands on the battlefield the fastest, wins. “.

In the same vein, when Vladimir Putin signed his ukase last week, ordering a significant increase in the size of his army, he also clarified in the process: ” the government is responsible for providing the army with the financial resources it needs “.

Defense spending expected to explode

Last year’s defense spending bill was already unprecedented in its scale, due to a very clear choice: for the first time in Vladimir Putin’s Russia, social spending moved from first to second place. Military spending became the number 1 budget. This year, this movement will further amplify. Bloomberg revealed this on September 24. The authorities are preparing cuts in social spending, particularly pension benefits – minus 700 billion rubles in total, which is still 10% of the budget.

At the same time, the defense spending bill is increasing: an additional 13,000 billion in 2025. This means that in 2025, out of 3 rubles spent by the Russian state, 1 ruble will be devoted to defense. This includes state defense orders, as well as the salaries of those who sign volunteer contracts or even bonuses and benefits in the event of injury or death, among other things. Russia now devotes just over 6% of its GDP to defense. This is a record since the time of the Soviet Union.

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